A round-up of the main news stories this week. [Transcript provided below]
October Sees Minimum Wage and Tax Changes
Changes to the minimum wage and VAT came into effect at the beginning of October. Those over the age of 21 saw a small rise in the minimum wage, to £6.19 per hour. The rate for under-21s remains frozen, though there was a marginal rise for apprentices. Meanwhile, amendments to the infamous pasty tax mean that food which is intended to be served hot or which is kept hot by a specific heating unit will now be liable for VAT. Supermarkets have criticised the decision, saying that many families will be forced to reconsider purchasing freshly cooked food if the price rises by 20%.
Bank of England Defends ‘Funding for Lending’ Scheme
The Bank of England has been forced to defend its Funding for Lending scheme after figures revealed that consumers were borrowing less, not more. New loans to households fell by £400 million, the Bank revealed, despite the launch of the scheme which was designed to cut the cost of mortgages. Paul Fisher, head of financial markets at the Bank of England, said that it will be impossible to judge the effectiveness of the scheme before the end of the calendar year.
Chancellor Urged to Boost Cash ISA Limit
The Chancellor has been urged to boost the cash ISA limit to improve conditions for savers. Though adults can currently save up to £11,280 tax-free every year, only half of that limit can currently be saved in cash. With rates on savings accounts tumbling, the Chancellor is being asked to increase the cash ISA limit to allow consumers to protect their savings from tax without having to resort to riskier options.
House Prices Fall for Third Consecutive Month
House prices fell in September for the third consecutive month, according to the Halifax. The society’s house price index said that prices fell by 0.4% between August and September, to just under £160,000. Halifax attributed this fall to the weak economic climate, and predicted that house prices would remain broadly unchanged over the rest of the year.
Co-Operative Bank Chooses Ethical Route to Staff Pay
And finally, the Co-operative Bank has ditched its sales-driven rewards for staff in favour of a scheme that rewards customer service. The move comes after the Financial Services Authority criticised British banks for their aggressive hard-selling mentality, where desperate branch staff are made to sell lucrative products to consumers that they don’t need. The Co-op had previously linked 3% of basic pay to sales performance, but it now says that it will reward staff for customer service at its best performing branches.
Here’s hoping the rest will follow! For the latest news and product updates, remember to visit us at Which4U.co.uk.