Credit Action News Round-up (14 September 2011)

Cost of dying rises to £7,248: Statistics from Sun Life Direct show that the cost of dying has increased to the equivalent of three months’ average salary. This figure represents a 20% rise over the past four years. The research comes as the rate of Consumer Prices Index (CPI) inflation rose from 4.4% to 4.5% in July, according to the Office for National Statistics (ONS). The Retail Prices Index (RPI) also increased from 5% to 5.2%. The figures from Sun Life Direct show that funeral costs have increased on a much larger scale by 61% since 2004. As well as funeral costs, probate fees, headstones and flowers are all expenses which affect the ‘cost of dying’. These have increased by more than £400 in the past year alone; a figure which Sun Life predicts will continue to grow. Nearly half of consumers have not made arrangements for funding their own funerals. Simon Cox, head of life planning for Sun Life Direct, said: “Many people are sleepwalking into a financial nightmare, leaving their end of life plans to either their families, the state or no one at all.”

UK unemployment rises to 2.51 million: In what the Office for National Statistics (ONS) has described as the largest increase in nearly two years, the jobless rate now stands at 7.9%. In the three months to July, the number of people unemployed rose by 80,000 to 2.51 million. Official records show that public sector employment fell by 111,000 in the second quarter of 2011 – the biggest decrease since recent records began in 1999. The most substantial contribution to the figures was youth unemployment which saw a sharp rise from 78,000 to 973,000. In August, the total claiming Job Seeker’s Allowance also rose sharply by 20,300 to 1.59 million. Analysts have put the unemployment figures down to weak economic growth.

15 million UK workers are to rely on state pension in retirement: One in three workers in the UK are without a private or company pension, according to new research by Prudential. This means that 15 million will rely on the state pension or personal savings for an income when they retire. A recent report by the Workplace Retirement Income Commission warned that up to 14 million workers will have far smaller pensions than their parents. Vince Smith-Hughes, head of business development at Prudential, said that not only are those without pensions facing a sharp drop in their incomes at retirement, but that they will also miss out on “significant” tax relief during their working lives. In the current system the Government offers tax relief on the pension contributions that workers make throughout their careers.

ICB report recommends more competition and transparency in the market: A report by the Independent Commission on Banking (ICB) calls for greater fees transparency. Banks should produce more detailed information on annual statements about the cost of a current account, the report said. The Commission also put the longstanding competition issues in UK retail banking down to the problems with changing a bank account - 77% of personal accounts are held with the largest four UK banks. To overcome this, the report recommended that people and businesses wanting to change banks should be able to switch accounts within seven days. A strong new challenger in the market was also suggested as a way to increase competition. The ICB also proposed that banks should separate their investment and retail arms to prevent a future financial crisis. The report called for the changes to be made by 2019.

Rollover contracts banned by Ofcom: Telecoms regulator Ofcom has banned rollover contracts which affect over a million BT customers. BT is the largest provider of these contracts, with an estimated 1.5 million customers on rollover deals. The year-long contracts automatically renew, and customers are charged if they want to leave the provider. Ofcom said that the contracts “raise barriers to effective competition by locking customers into long-term deals with little additional benefit.”  The contracts for both landline and broadband internet services will be banned from December this year. Those who have signed the contracts already will be moved onto different deals by December 2012. 

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