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Toyota profits

06 Feb 2019

Toyota profit warning

Toyota Motor Corp’s quarterly operating profit edged up as a result of its increasing sales in the Asian market, offsetting the 81% drop in net profit as a result of lower sales in North America, its largest market.

The Japanese automaker lowered their forecasted net profit for 2018 from 2.3 trillion yen to 1.87 trillion yen ($17 billion), alluding to unrealised losses on some of their equity investments, however, reiterated its annual operating profit projection of 2.4 trillion yen.

Operating profit for Toyota for their October to December quarter was recorded at 676.1 billion yen, which was up 0.4% from 673.64 billion yen in the same period last year.

Global retail sales for the company rose 2.8% to 2.71 million units, from 2.63 million units earlier on in 2019. The increase was driven by the sales rising to 464,000 units in Asia, including China, compared to 404,000 during the same period last year.

30% of the annual sales for Toyota come from North America. However, as the demand for cars in that region has stagnated over the past two years, a drop in units sold was seen, with them selling only 680,000 units during that quarter, compared to 735,000 the year before.

In North America, operating profit was recorded at 45% lower from the year earlier.

Despite the drastic fall in sales in the North American region, China was a bright spot for Toyota, offsetting the decline. Particularly through the strong demand for their luxury brand Lexus.

Lower tariffs on cars made in Japan have helped many Japanese carmakers from the slowdown in China, including Toyota. Whereas many of its competitors, such as Ford Motor, reported losses amid the China and United States trade war.

Warming political ties between Japan and China have also helped many Japanese automakers.

By Lyba Nasir

1p 2p coins

03 Jan 2018

Spending less on luxuries could mean an additional £10,000 a year in retirement

Research conducted by life, pensions and investment company, Scottish Widows, shows that savers could have as much as £9,853 in additional annual income in retirement if they cut back spending on luxuries in their early years.

The provider’s calculations are based on a 22-year-old planning to retire at 68, and putting £124 a month into a pension with a matching contribution from their employer.

On average, individuals were found to be spending £124 per month on “every-day luxuries”, including ordering takeaway meals, taking taxis rather than public transport and buying clothes that are never or rarely worn. At the same time, 32% of people said they simply cannot afford to save any more than they already do.

According to the research, the majority of people underestimate how much they spend on everyday luxuries by £74 a month. One in nine people admitted to not tracking their incidental spending at all and had no idea how much they were paying out for non-essentials.

The research also showed that 62% of people plan to set a financial goal in 2018, whether that is spending less (28%) or saving more (45%). A third of people spend less in January, cutting back by an average of £109.03 during the month and while 30 per cent use this money to pay off debts, only 25 per cent save some of it.

Robert Cochran, a retirement expert at Scottish Widows, claims that January is traditionally a time when individuals set out to improve their financial habits for the year ahead.

He said:

“While it would be unrealistic to suggest we live entirely without little luxuries, there is an important message about the need to ensure untracked spending today doesn’t harm our financial security tomorrow.”

Mr Cochran continued to say:

“Our Retirement Report shows almost 23 million people are failing to save adequately for retirement, and so there is no time like the present to make the first step towards positive change”.

By Kathryn Pegler

30 Aug 2016

Tour of Britain Stage 3: Bollington gone biking bonkers

Tour de France, Olympics and now the Tour of Britain, it’s no wonder our village has gone orange bike bonkers after the great successes recently of our Great British cyclists. We thought they were brilliant at the London Olympics, and unbelievably they were better in Rio.

Living on the Wirral in the 90’s we celebrated the 1992 Olympic win for local cyclist Chris Boardman, and for a long while after our roads were full of cyclists at the weekends. In particular down the Wirral Way; this ran from West Kirby in the North to Hooton, and follows part of an old railway track down the west coast. The last few Olympics and the Tour de France have hyped it all up again, especially as we now have so many top British cyclists to celebrate and support. The 2016 Olympics and our brilliant Team GB gave us so many memories but the most enduring I suspect will be of Bradley Wiggins pulling his face and putting his fellow team mates in to hysterical laughter on the podium with their gold medals.

So it is with great delight that we heard that he will be racing in the Tour of Britain this year and, even better for me is that he is coming straight past my house. The village has been preparing for the last month or so with a small but valiant team collecting unwanted bikes and painting them orange. When they had run out of bikes, or it became impossible to hang a real one from a window the plastic cut outs adorned railings, windows, lampposts, fences anywhere in fact that you could stick one. So it was a pleasure to be asked if they could attach one to our railings.

On arriving home on Friday we had a little hat left on our railings in the hope that the owner of said little hat could retrieve it, but in a Wiggo moment I couldn’t resist putting the hat on the orange cut out cyclist. I walked in doors chuckling to my self and when I pointed out what I had done to my husband he had a chuckle too. To my amusement everyone that went past thought it was funny as well.

The hat has now gone, hopefully back to its owner and we now only have a short time to wait until we can cheer the cyclist on as they go up into the climb, not as severe as some of those in France but still should test a few with the pinnacle being at the Cat & Fiddle (one of the highest pubs in England at 1,772 feet) before descending back down through Macclesfield forest and heading for the finishing line in Knutsford.

Thank you to all of you involved in British cycling, and thank you Team GB for putting the pride back into Olympics. We have been so used to not winning that I think we have forgotten how to celebrate but if you come through Bollington you will see that we are getting back in the swing of things.

Good luck to all who are cycling.

By Wendy Baker-Rees

31 May 2016

Major DB pension scheme inquiry launched

An inquiry has been launched by MP Frank Field into defined benefit pensions in order to find ‘radical solutions’ to the increasing pressures on retirement savings, which is posed by rising life expectancy and low investment returns.

On Friday 27th May, a statement was released by the work and pensions select committee, stating that unsustainable promises made to scheme members were being “stacked up against” the jobs of younger generations.

He said that without urgent action, ‘the impact of millions of people’s living standards from intergenerational trade offs of income and wealth is brutal.’

Mr Field did not specify the nature of these ‘radical solutions’.  However, the MP for Birkenhead said they could include reductions in member benefits.

The comments from Mr Field came a day after the government revealed it was considering changing the law to allow the British Steel Pensions Scheme to peg its annual benefit increases to the consumer price index (CPI) rather than the usual higher retail price index (RPI). The proposal was introduced as part of an effort to find a buyer for Tata Steel UK – the scheme’s sponsor.

Mr Field said: ‘We should be under no illusions that British Steel is a special case.

‘Eleven million people have private defined benefit pensions. More than 5,000 of the associated schemes are in deficit to the tune of £805bn, while the combined surpluses of other schemes is £4bn.’

He continued to explain that the committee’s in-depth case study of the massively under-funded BHS pension scheme showed DB schemes are ‘already creaking from rising life expectancy and record low returns on capital.’

A financial adviser with Lamb and Associates Lifestyle Financial Planning, said it may be inevitable the liabilities of the final salary schemes would have to be reduced.

He said:  ‘The argument is, if you reduce the liability, it means it’s less likely the schemes will fall into the Pension Protection Fund.’

He explained that if more and more funds fall into the PPF, then it may have to be bailed out by the government.

However, he said the inquiry should not be limited to the private sector schemes, saying the liability of the public sector was also ‘phenomenal’.

By Samantha Atherton

16 May 2016

MPs request overhaul of pension regulation

Major concerns have been highlighted by MPs on the work and pensions select committee, regarding governing auto-enrolment master trusts where such schemes are investing their members’ funds, calling for an overhaul of the regulation.

In a report released on the 15th May, the committee requested a pension’s bill to be included in the Queens Speech on the 18th May to address the ‘risk from weaknesses in pension regulation’.

The report raised concerns about multi-employer occupational schemes where each employer has its own division within the arrangement, otherwise known as master trusts.

It stated that gaps in the current rules have allowed ‘potentially unstable’ master trusts onto the market with employers putting their scheme members at risk of losing savings for their retirement.

The Pension’s Select Committee also expressed their concerns of the incoming Lifetime Isa stating it could ‘distract from the auto-enrolment, with employees potentially opting out of their workplace scheme to put savings in a lifetime Isa’.

Frank Field MP, committee chairman, has put governance and investment oversight at the top of the list of regulatory priorities.

“Auto-enrolment has been a tremendous success that will ultimately see approximately nine million people newly saving, or saving more, in a pension” he said.

“Crucially now we must do much more to ensure people’s savings are put in the best possible place, and are secure. To this end, we greatly look forward to seeing a Pension

Bill in the Queen’s Speech this week. This is what we and others have been calling for.”

The committee have recommended that the government improve its communication with businesses trying to put pension schemes in place.

By Samantha Atherton

26 Apr 2016

Aviva pays £839 million to protection customers during 2015

In 2015 Aviva paid more than £839 million to individual protection customers and their families via claims on Aviva and Friends Life life insurance, critical illness and income protection plans.

Aviva bought Friends Life in April 2015 and the combined company paid more than £500 million to the families of life insurance customers who died from a terminal illness that year.

£303 million was paid out to customers with critical illnesses and an additional £35 million went to customers with income protection plans. Income protection plans help customers to meet their living costs when they have been unable to work due to illness.

Statistics showed that last year more than 23,000 customers and their families had benefitted from life, CI and IP claims. The 23,000 customers included 15,000 life and terminal illness claims, more than 4,000 critical illness and almost 4,000 income protection claims.

Out of the claims made in 2015, 98.9 per cent of the life insurance claims and 92.5 per cent of critical illness claims were paid.

The percentage was 93.5 per cent of Aviva critical illness policies, up by 0.2 per cent from 2014 and 91 per cent of Friends Life policies compared to 93.3 per cent in 2014.

The critical illness claims which were not paid were due to 1.6 per cent being declined due to non disclosure and 5.9 per cent for conditions required not being met.

Out of all the claims made, the average sum paid to critical illness customers was £74,275.

The average age of Aviva critical illness customers who claimed was 45 years old for women and 49 years for men.

63 per cent of all critical claims were linked to cancer, making it the most common cause of critical illness claims in 2015. This was followed by heart attacks at 10 per cent, strokes at 6 per cent, and multiple sclerosis and total permanent disability both at 4 per cent.

The chief underwriter for protection at Aviva, Robert Morrison said: “No one ever wants to claim against this type of policy, but knowing that as a combined group we are committed to paying claims wherever possible will provide customers and their families with the reassurance and comfort they need if they face such difficult times.”

By Samantha Atherton

25 Apr 2016

FCA releases warning on four new clone firms

A number of warnings have been issued from the Financial Conduct Authority (FCA) regarding firms that it believes are providing financial services without authorisation.

The firms named by the FCA include RBS Bourse, Capital Trust Ventures, Andersen Consulting (UK) and Beckett & Cromwell. They have been targeting consumers in the UK without being authorised by the FCA.

The FCA warnings included contact details for each of the firms included and stressed that almost all companies who offer, promote or sell financial services or products in the UK have to be authorised by the regulator.

It stated that some firms act without authorisation and some knowingly run scams like share fraud.

FCA say that share scams are often run from ‘boiler rooms’ where fraudsters cold-call investors and offer them worthless and over-priced shares, with some of them not existing at all. These types of scams declare consumers will receive high returns but those who invest usually end up losing their money.

In order to avoid such scams, the FCA has advised people to only deal with firms that are authorised by them and to check the Financial Services Register to ensure that the company they plan to deal with are.

The Financial Services Register includes information on firms and individuals that are currently regulated by them or have been in the past.

The warnings issued provided advice in that consumers should be aware that if they give money to unauthorised firms, they will not be covered by the Financial Ombudsman Service (FOS) or Financial Services Compensation Scheme (FSCS).

One particular scam that has been of priority for the regulator in 2016 is pension scams. In 2015, the watchdog launched a campaign titled ‘Scamsmart’, which is aimed at preventing crime on those who are in or approaching retirement.

The flexibility that was provided by the pension freedoms has given fresh impetus to the scammers looking to operate to this audience.

To tackle the problem, a new phase of ‘Scamsmart’ is running across 2016/17. The phase will include an interactive tool called the ‘Warning List’, which will help people to avoid potential scams.

By Samantha Atherton

15 Apr 2016

MPs criticise HMRC on tackling tax frauds

MPs have criticised HM Revenue & Custom’s attempts to fight tax fraud, describing the number of criminal prosecutions for offshore tax evasion as still ‘woefully inadequate’.

A report was published today (15 April) from the Committee of Public Accounts concluding that not enough is being done by HMRC to tackle tax fraud.

The report stated that, over the last five years, the tax office has made ‘only limited progress’ in reducing the level of losses through crime which has been ‘relatively constant’.

The MPS ruled that HMRC has not set out a clear strategy for dealing with tax fraud and does not know what meeting its target of 1,000 additional prosecutions this year has achieved.

The Committee of Public Accounts stated that the departments reporting of its own performance is ‘too confusing’ and requested  HMRC address the perception that it does not tackle tax fraud by the wealthy.

Recommendations in the report included HMRC to clearly set out in its annual reports the relationship between its compliance yields and changes in ‘the tax gap’.  It states that they should also publish this information ‘in a way that is accessible for everyone to understand’.

According to MPs, tax fraud results in losses of some £16bn a year. This is almost half of the £34bn gap of how much it should be collecting.

The committee has called on HMRC to set out its strategy to tackle tax fraud by November this year, as well as to take steps to ‘counter the belief that people are getting away with tax evasion’.

They have told HMRC ‘to increase the number of investigations and prosecutions, including wealthy tax evaders, and publicise this work to deter others from evading tax to send out a message that those who try will not get away with it’.

By Samantha Atherton

30 Mar 2016

ABI data reveals annuity revival

Data from the Association of British Insurers has revealed that annuities are starting to see a rise in popularity following their post-pension freedom fall.

During the fourth quarter of 2015, 21,200 annuities were sold, which is worth £1.1 billion, compared with 19,700 drawdown policies, worth £1.4 billion.

The data found that annuity sales are currently almost on par with drawdown sales since the reforms came into place.

Overall, £3 billion has been paid out in 213,000 cash lump sum payments since April 2015, with an average payment of £14,800.

A total of £2.9 billion has been paid out via 835,900 income drawdown payments, with an average payment of £3,500.

With regards to funds invested in new products since the reforms came in, £4.2 billion has been invested in 63,600 income drawdown products, with an average fund of £66,000.

In total, £3.3 billion has been invested in around 61,700 annuities, making the average fund invested nearly £53,000.

The ABI states that smaller pots are commonly taken as lump sums, while larger pots are still used to access a regular retirement income, with an average fund invested of £59,600.

Additionally, almost £7.5 billion has been invested to buy nearly 125,500 regular income products, either in the form of annuities or income drawdown products.

Another observation found is that people tend to use drawdown as a regular income product, with 65 per cent withdrawn in the fourth quarter being worth £1,000 or less.

The data also suggested that the amount of cash lump sum withdrawals is decreasing, as demand settles following the reforms.

Only £660 million was withdrawn in cash in the fourth quarter, compared to £1.3 billion and £1.2 billion in the second and third quarters respectively. Over half of cash withdrawals were less than £10,000.

Yvonne Braun, the ABI’s director of policy for long term savings and protection said that following some initial pent up demand, the number of people accessing their pension pot as cash in one go has settled down.

“Annuity sales are beginning to see a revival, with more annuities than drawdown products sold in the last quarter; this shows people still really value a lifelong guaranteed income.”

By Samantha Atherton

29 Mar 2016

The PRA review the buy-to-let underwriting standards

The Prudential Regulation Authority (PRA) has published a consultation on proposals regarding the minimum standards firms should meet when underwriting buy-to-let contracts.

The Bank of England’s regulatory arm expressed that these proposals also include clarification concerning application on small and medium enterprises (SME) supporting factor on buy-to-let mortgages.

The PRA is aiming “to prevent a marked loosening in buy-to-let underwriting standards and to curtail inappropriate lending and the potential for excessive credit losses” as well as enhancing the transparency and stability of its regulatory approach.

The paper proposes the following:
i) A set of expectations for firms that underwrite UK buy-to-let mortgages contracts where the land is intended to be occupied as a dwelling on the basis of a rental agreement, in pounds sterling, regardless of whether the borrower is an individual or limited company; and
ii) A clarification in relation to application of the SME supporting factor on buy-to-let mortgages.
The supervisory statement follows a PRA review of underwriting standards in the buy-to-let sector which consisted of 31 firms. The review highlighted concerns about lenders’ growth plans and how they might be met.

The PRA review found a risk in firms relaxed underwriting standards, which affects their safety and soundness, suggesting a need for microprudential action.

The proposals from the PRA support the Financial Policy Committee’s ability to act from a macroprudential perspective.

A statement from a recent FPC’s meeting has made it clear it will continue to monitor developments, including the impacts of this review and forthcoming tax changes.

“The FPC remains alert to potential threats to financial stability from rapid growth in buy-to-let mortgage lending.

“The macroprudential risks centre on the possibility that buy-to-let investors could behave pro-cyclically, amplifying cycles in the housing market, as well as affecting the resilience of the banking system and its capacity to sustain lending to the wider real economy in a stress.”

By Samantha Atherton

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