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Pension savings in small firms is ‘inadequate’

Savings levels in pension schemes offered by small firms need to be doubled in order to provide staff with an adequate retirement income, according to the Association of Consulting Actuaries (ACA). Saving levels are at similar levels to 1996 and the ACA has warned that pensions for employees of small firms retiring now and in the near future are, "increasingly inadequate." The trade body surveyed just under 400 small companies and found that the average combined employer and staff contribution in firms that employ less than 50 staff is just 8% of members pay.
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Office workers receive average of 450 emails on return to work

The average office worker will have 450 emails, 70% of which will be spam, awaiting them when they return to the office today after the Christmas break. Small business workers are being advised to not delete all the messages, as it could lead to vital information being lost. "It brings a cathartic pleasure [deleting all messages] but you may be deleting critical information," advises Bob Hallewell of consultancy firm Expert Messaging.
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House prices continue to fall

House prices in England and Wales fell by 1.9% in November, taking the year-on-year figure to 12.2%, according to figures released by the Land Registry.
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Employers can ‘save money’ by retaining staff

Firms are being advised that they can save more money by keeping staff as the average redundancy costs employers over £16,000 before any savings are made, according to the Chartered Institute of Personnel and Development (CIPD). "While making people redundant can seem one of the most straightforward ways of cutting costs, redundancy is itself a significant cost to most organisations with a number of direct and indirect or hidden costs," said CIPD chief economist John Philpott. The CIPD has warned that over 600,000 UK jobs could be lost this year, with other institutions predicting that the figure could be even higher. The latest statistics have show that 1.86m people are out of work in the UK - the highest figure since 1997.
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Passenger groups criticise train fare increases

Rail passenger groups have criticised the latest increases in train fares as being out of kilter with the real economy.
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Second banking bailout considered by Chancellor

Alistair Darling is reportedly considering a second banking bailout as the lending crisis worsens. The Chancellor will soon decide whether to inject more money into UK banks as evidence grows that the initial £37bn bail-out has not stimulated borrowing as expected. This follows a report released by the Bank of England that banks decreased lending in the final quarter of 2009 and are currently planning even tighter restrictions. Despite the £37bn taxpayer’s bailout many small business owners still struggled to access funds from their banks and saw their charges for overdrafts and lending actually increase. “The government is going to have to do more to restore credit flows across the country,” said Richard Lambert of the Confederation of British Industry. Without firmer government control of the bank to make them increase lending, it is unclear what good any further cash injection would be.
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House prices declined over 16% in 2009

The average price of a home in the UK has fallen to the lowest level since August 2004, according to figures released by the Halifax. A drop in value in December of 2.2% brought the average cost of a home down to just under £160,000. Prices dropped by over 16% in 2008 – the largest drop since the lender began records in 1983 – and follow news from the Bank of England that getting a mortgage is increasingly difficult. The Bank of England has released figures showing that the number of mortgage approvals in November last year fell to a nine-year low of 27,000. "Continuing pressures on incomes and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to exert future downward pressure on the market over the coming months," said Halifax chief economist Martin Ellis. Mr Ellis went on to add that he expects house prices to fall an extra 15% in 2009, bad news for any small businesses owners whose house a main financial asset. "This bodes ill for business activity, investment, employment, consumer spending and housing market activity," said Howard Archer of IHS Global Insight.
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BCC call for national minimum wage to remain unchanged in 2009

The national minimum wage should be left at current levels in 2009 due to the economic downturn, according to The British Chambers of Commerce (BCC). The BCC believes that the minimum wage should not be increased until the economic situations had significantly improved, as many businesses are already struggling and an increase at a similar level to 2008 would cost firms around £300m. "We're not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase it," said David Frost, director general of the BCC. The minimum wage for employees over 21 increased by 3.8% in October to £5.73 per hour and stands at £4.77 for staff between 18-21 and £3.53 for those aged 16-17.
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UK economy predicted to shrink by 2.9% in 2009

A group of independent economists have predicted that the UK economy will shrink by just under 3% in 2009 – the largest contraction since 1946. The Centre for Economics and Business Research (CEBR) expect investment in businesses to decrease by 15%, causing real problems for the economy with firms struggling to access finance. "Despite public declarations by the government that the banks ought to be lending more, it is clear the primary concern of many of our largest banks is to shore up their balance sheets," said CEBR managing economist Ben Read to the Daily Telegraph. Mr Read added that if the decline in business investment is coincides with a decline in consumer confidence and spending then, "a contraction of between 5% and 10% could be on the cards, setting the UK economy back by five years", he added.
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15 retailers could collapse at start of next year

Up to 15 national and regional retail chains could go bust at the start of 2009, according to insolvency experts. Corporate rescue and recovery specialists Begbies Traynor commented that it would, “not be surprised” if up to 15 chains collapsed before the end of January due to an inability to pay the first quarter of rent. The warning comes as one of the largest post-Christmas sales takes place, with some stores cutting prices by up to 90%. “I think that it’s going to be a very bad year for retailers and we’re likely to see more announcements like we’ve seen from Woolworths and MFI,” said Matthew Sherwood, a senior economic advisor at analysts Experian.
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