Money Marketing’s Weekly Must-Reads: Top 10 Stories

Will Chancellor Reeves’ Budget deliver? And what’s in store for self-employed advisers? Find out in this week’s top stories:



State pension set for 4.1% rise next April

The state pension is expected to increase by 4.1% in April 2025 due to the triple lock formula. This means those on the full new state pension will receive £230.30 a week, while those on the basic state pension will get £176.45. The rise is based on average earnings growth (4.1%) exceeding both inflation (1.7%) and the 2.5% minimum. However, some pensioners may see a smaller increase due to a rule affecting pre-2016 pensions.

SJP hires Adam Higgs to help drive growth in protection

St James’s Place (SJP) has appointed Adam Higgs as its new head of protection. Higgs, formerly of Protection Guru, will focus on enhancing SJP’s protection offerings and driving growth. He will work with SJP advisers to ensure clients receive adequate protection, aiming to solidify SJP’s position in the protection market. Higgs brings extensive experience from his previous roles at Protection Guru, the FTRC, Foster Denovo, and Scottish Life.

FCA: ‘We’re not against small firms’

The FCA has denied claims it is forcing small advice firms out of the market through increased regulation. Nick Hulme, FCA head of advisers, wealth and pensions, emphasised the value of small firms and their crucial role in closing the advice gap. He acknowledged the challenges faced by smaller firms in meeting regulatory requirements, but highlighted the Consumer Duty as a way to ease this burden. Hulme stressed the FCA’s commitment to supporting all advice firms, regardless of size, and aims to foster collaboration to benefit consumers.

Removing IHT tax break on AIM stocks ‘might make it unfit for purpose’

There are concerns that Labour may scrap inheritance tax relief on AIM stocks in the upcoming budget. This could significantly impact the AIM market, which has already seen a decline in IPOs. Removing this tax break might deter investment in smaller companies, hindering economic growth. Critics argue that AIM is already struggling, with low liquidity and trading volumes, and suggest the government’s PISCES framework as a better alternative for private companies seeking funding.

Financial Life Planning hires Rebecca Tuck as ops director to drive growth

Financial Life Planning, founded by Kate Shaw, has appointed Rebecca Tuck as operations director to spearhead the firm’s expansion. Tuck aims to streamline internal processes and enhance the client experience before expanding the team. The firm, which champions a client-centric approach, is undergoing a rebrand to attract those who feel underserved by traditional financial planning, particularly Gen X women. They are actively seeking new employees who align with their values and client-focused ethos.

Attivo appoints former Schroders director as CEO

Attivo, a chartered independent lifestyle financial planning business, has appointed Jo French as its new CEO. French brings over 25 years of experience in financial services, having held senior roles at Schroders, Benchmark Capital, Pointon York and Embark Group. She will focus on operational improvements, client experience, and Attivo’s investment platform strategy. Stephen Harper will continue as chair, leading the overall business strategy.

Tim Sargisson: Small advice firms heading for extinction

The number of small advice firms is rapidly declining, according to Tim Sargisson, former chief executive of James Hay and Sandringham Financial Partners. He cites increased regulatory burdens, competition, and the rise of digital services as key factors. While niche markets and outsourcing offer potential solutions, they also carry risks. Sargisson predicts that small firms may ultimately disappear, mirroring the decline of traditional high street shops.

Investors’ ‘love affair’ with ESG continues to cool

Investor interest in ESG (environmental, social and governance) factors has fallen for the third consecutive year, according to the Association of Investment Companies. While almost half of investors still consider ESG, this is down from 66% in 2021. Concerns about greenwashing and performance remain, though governance is growing in importance. Older investors are less likely to consider ESG factors compared to their younger counterparts.

Greg Moss: Death of the small firm? Fat chance

Greg Moss, founder of Eleven.2 Financial Planning, challenges the idea that small advice firms are heading for extinction. He argues that small firms are still dominant in the advice market and offer advantages over larger firms, such as greater innovation and better client outcomes. While acknowledging the importance of technology, Moss emphasizes the value of personal interaction and client care, which he believes small firms are better equipped to provide. He also highlights the limitations of large firms, including bureaucratic processes and a focus on commoditised services. Moss concludes that small firms will continue to thrive as long as they prioritise client needs and relationships.

Industry gives final thoughts on FCA’s value for money framework proposals

The FCA’s proposed value for money framework for pension schemes, which closes for consultation today, has garnered mixed reactions from the industry. While broadly supportive of the aim to improve value for savers, concerns remain about potential market disruption, the complexity of the metrics, and the need for consistent application across different pension types. Some argue for a more nuanced approach that considers the diverse needs of the market and encourages innovation.

“The starting gun has been fired on the break-up of Boohoo”, said Russ Mould, investment director at AJ Bell.

“Selling Karen Millen and Debenhams is the obvious starting point, leaving Boohoo with a sharper focus on a younger target market”.

Retail analyst Catherine Shuttleworth added that fast-fashion firms are “under pressure” as shoppers think more sustainably and are “making different choices”.

Boohoo bought Karen Millen for £18.2m in 2019 and three years ago it took on department store brand Debenhams for £55m.

“Acquired brands like Debenhams and Karen Millen, now purely online players, haven’t had the impact on shoppers that the business might have liked”, said Ms Shuttleworth.

Boohoo admitted on Friday that its youth brands were struggling, including boohoo.com, boohooMAN and PrettyLittleThing but said it expected that to improve in the second half of its financial year.

John Lyttle would be leaving. He joined the company six years ago from Primark.

Under Mr Lyttle, the company has attempted to shift its image away from fast fashion. In 2021, he told the BBC that Boohoo was not a “throwaway fashion brand” and the firm was aiming to be more sustainable.

In a short statement in the release, the outgoing chief executive said he would stay on until his successor was found.

The company also reported that its sales had fallen by 15% to £620m for the six months to the end of August. Trade tumbled across the UK, the US and internationally.

A MAJOR update has been issued to millions of customers affected by a supermarket bank takeover.

In February, Barclays agreed to purchase Tesco’s retail banking division, which included the acquisition of nearly 3,000 employees.

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Customers have now been informed that their services will officially be transferred and managed by Barclays from November 1.

This follows the regulator’s approval of the takeover yesterday.

Tesco Bank currently offers a range of personal banking and insurance products, including personal loans and credit cards, to over four million customers.

The supermarket bank will retain some of its insurance services, ATMs, travel money, and gift cards.

However, all other services, including credit cards and personal loans, will be transferred to Barclays next month.

Although Barclays will manage these services, they will continue to be marketed under the Tesco Bank name for now.

Tesco Bank stopped offering mortgages through its bank in 2019 after seven years.

It’s 23,000 mortgage loans were sold to Lloyds Banking Group, which Halifax is part of, for around £3.8billion.

Tesco Bank also offered current accounts, which were closed to all customers in November 2021.

Those affected by the switch to Barclays are not required to take any action before the switch, and there will be no changes to their services after it occurs.

WHAT IT MEANS FOR YOUR MONEY

In the short term, it is likely customers won’t notice much change.

Your credit card and personal loans will still be marketed under the Tesco Bank name, and you won’t need to request a new card or change how you’re repaying any debt.

Barclays has said that it will continue to operate the business under the Tesco Bank brand for at least 10 years as part of a “long-term, exclusive strategic partnership”.

While no staff will transfer to Barclays under the scheme, it is anticipated that “approximately 2,523 employees across the UK and India” will eventually move over to the banking giant.

Tesco Bank will continue to operate its insurance products, ATMs, travel money and gift cards under its own roof.

In the meantime, it’s always worth checking to see if you can get a better credit card or land deal elsewhere.

FIND THE BEST CREDIT CARD AND LOANS

To assess all the available cards and personal loans, visit price comparison websites like MoneySavingExpert’s Cheap Credit Club or Compare the Market.

These sites allow you to tailor the perks you’re looking for, whether it’s cashback, air miles, or other rewards.

You should always use an eligibility calculator before applying, that’s because every credit card application leaves a mark on your credit file and can affect your credit score.

Once you run your details through an eligibility calculator and you’ve been shown that you’re likely to be accepted, make a formal application.

To do this, you will need to provide your name, address and email address as well as details of your income so a provider can assess your eligibility.

You will also need to provide details of how much money you want to transfer to the new card, but you can often do this after you have been accepted.

If your application is approved, you will need to transfer the balances within a set period, usually around 60 or 90 days.

Your old balance will then be cleared and you can start making interest-free repayments on your new card.

OTHER BANKING NEWS

Tesco Bank isn’t the only supermarket bank to have been sold in recent months.

NatWest agreed to purchase Sainsbury’s Bank in June 2024.

This follows Sainsbury’s announcement in January that it would wind down its banking division to focus on its retail business.

NatWest said it expects the takeover to be completed by March 2025, and all customers will be moved over by the end of next year.

However, Sainsbury’s will retain some of its banking activities, including insurance and travel money.

Argos Financial Services is also not included in the deal.

Last summer Sainsbury’s Bank offloaded its £479million mortgage book to Co-op Bank.

Elsewhere, Britain’s largest building society announced that it had agreed to a £2.9billion deal to take over Virgin Money in March.

Under the plans, approved by regulators in October, the two companies will run as separate entities.

The Virgin Money brand will be retained for six years before being rebranded to Nationwide.

The move will create a combined group with around 24.5million customers, more than 25,000 staff and nearly 700 branches.

This will make the organisation the country’s second largest mortgage and savings group.

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

In September, the far right, anti-immigrant Alternative for Germany (AfD) party won the most seats in a state election for the first time. Concerns about the AfD’s rise have been growing for some years, but this was the clearest sign yet of the threat the party poses to Germany. As such, the arrival of Djinns in English couldn’t feel more timely.

Djinns — a word of Arabic origin that one character, Peri, says can be used to mean “everything we think is strange, different, unnatural” — was a bestseller upon publication in Germany in 2022. The book, the second novel by Berlin-based Fatma Aydemir, herself the granddaughter of Turkish-Kurdish immigrants, is a deft, multi-layered story of one immigrant family’s life. It feels epic, although its primary storyline happens over just a couple of days in 1999.

We begin with 59-year-old Hüseyin in the Istanbul apartment where he hopes to retire. As he walks its rooms he looks back over what he has endured since first going to Germany as a Gastarbeiter (guest worker) in 1971, and then settling with his family in Rheinstadt, Thuringia — the state the AfD won this year.

But then Hüseyin suffers a heart attack and dies. The Muslim tradition is to bury loved ones as soon as possible, so his wife and four children hurry to Istanbul.

The novel’s six chapters are each told from a different family member’s perspective. We hear from the couple’s youngest son, 15-year-old Ümit, who is caught up in struggles with his sexuality. His oldest sister, single mother Sevda, fell out with their parents years ago. Peri, a student in Frankfurt, has begun to question their parents’ values, not least the unspoken rule that the family doesn’t speak Kurdish any more. And then there is Hakan, angry at the lot his child-of-immigrants status has handed him, despite his love for that most German obsession: driving on the autobahn at breakneck speed.

Most moving is their mother, Emine’s, chapter. None of her children know the extent of her trauma, until Hüseyin’s death leads to her disclosure. “He took away and gave me everything, your father,” she says.

Aydemir is unrelenting in her depiction of racism. Arsonists target migrant homes, and racist slurs are frequent. But despite this weighty subject matter, its language is playful, translated with a lightness by Jon Cho-Polizzi. Upon hearing of her husband’s death, Emine “had become a collapsed heap of limbs . . . as impossible to reconstitute as the stewed meat in a pot of goulash”. It’s a wonderful, awful image.

Aydemir’s novel is about Turkish migrants in Germany. But its majesty as a work of literature is in its universality. All over the world, people choose or are forced to leave their homelands. Working out how we can better welcome these migrants is essential if democracy is to survive, and to do so we must open our ears to the reality of their experiences. English-language readers of Djinns must not see this as a German problem; as is evident in the rhetoric of British far-right politicians, the task is ours, too.

Djinns by Fatma Aydemir, translated by Jon Cho-Polizzi, Peirene Press £12.99, 368 pages

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MARTIN Lewis has revealed two reasons why the “vast majority” on state pension won’t get the full £473 boost next year.

The state pension increases every year in a bid to keep up with rising costs, but not everyone sees their payments go up by the same amount.

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Under the triple lock, payments rise in line with whatever is highest out of: wages for May to July, 2.5% or September’s inflation figures.

This week the Office for National Statistics published revised figures of 4.1% for July’s wages. 

It also confirmed that September’s inflation rate fell to 1.7% – making wages the determining factor for the lock. 

The full new state pension will increase from £221.20 a week – £11,502 per year –  to £230.30 a week or £11,975 per year.

However, speaking on this week’s The Martin Lewis Podcast, the consumer expert revealed there are reasons millions will not get the full headline figure.

Martin said: “The figure you will see in most places quoted that state pensioners will see a rise of £475 a year, in practical terms that is an unrealistic figure for the vast majority of pensioners who will not see that rise.”

He then went on to explain that this is due to the figure relating to the full new state pension.

This pension came in in April 2016 and is a “totally new” type of pension for anyone who hits state pension age in or after that time.

Martin continued: “But if you look at the numbers, only one in four state pensioners get the new state pension, the rest are on the old state pension because they hit state pension age beforehand.

“The old state pension is less in its basic form than the new state pension, therefore a 4.1% rise in the old state pension is not as much so the vast majority of state pensioners won’t see £475 a year, they will see £363 a year as the full old state pension rise – it’s much smaller than is often quoted.”

The MoneySavingExpert then went on to explain that even those on the new style state pension can only get the full amount if they have the correct amount of qualifying years.

Under current rules, you need 35 “qualifying years” to get the full new state pension.

He said: “If you don’t have your ‘full’ qualifying years which millions don’t, especially many of the poorest – many of those who are eligible for pension credit – then you won’t get the full rise because it is a 4.1% rise on what you got and the £363 a year for the old state pension is if you’re on the ‘full’ old state pension.”

It’s important to bear this all in mind, Martin explained, pensioners need to have “realistic expectations” of what they can get.

He continued: “But also in the debate over winter fuel payment is what’s often quoted is the triple lock increase of £475.

“But only one in four state pensioners get the new state pension which is the higher amount and many of those won’t be on the ‘full’ state pension – so we need to be slightly careful, many people have come to me and said yeah but they get this triple lock of this much extra a year – but the vast majority of pensioners won’t get the full £475 which is what you will see quoted in many media outlets and many government communications.

“The vast majority of pensioners will see an uplift that is far less than that because the vast majority of state pensioners are on the old state pension and many don’t have the full state pension.”

Topping up your state pension

If you think you’re missing National Insurance years, the first thing to do is check your State Pension forecast.

You can check this as well as the State Pension age through the government’s new ‘Check your State Pension’ tool online at www.gov.uk/check-state-pension.

The tool is also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.

You might be able to buy back years.

But earning back the years isn’t free, so your voluntary contributions come at a price.

If you fill gaps between 2006/07 and 2015/16, you’ll pay the 2022/23 rates for contributions.

It is worth £15.85 a week, which means it costs £824.20 to buy one year of contributions.

As the state pension was £185.15 per week in 2022/23, this boost would add £5.29 per week or around £275 per year. 

Although you’d have to pay £8,242 (10 lots of £824.20), the annual state pension boost would be around £2,750.

Someone who was retired for 20 years would get back around £55,000 in total (before tax).

Anyone under 73 can make voluntary pension contributions, as it’s assumed everyone under this age will claim the new state pension.

If you’re below the state pension age, you can check your state pension forecast by visiting www.gov.uk/check-state-pension to determine if you’ll benefit from paying voluntary contributions.

You can also contact the Future Pension Centre by calling 0800 731 0175.

If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.

You can contact this service in several different ways by visiting www.gov.uk/contact-pension-service.

You can usually pay voluntary contributions for the past six years.

The deadline is April 5 each year.

For example, you have until April 5, 2030, to compensate for gaps in the tax year 2023 to 2024.

The deadline has been extended for making voluntary contributions for the tax years 2016 to 2017 or 2017 to 2018. You now have until April 5, 2025, to pay.

Find out how to pay for your contributions by visiting www.gov.uk/pay-voluntary-class-3-national-insurance.

You could also be eligible for the top-up benefit Pension Credit if you’re 66 or older and your income is below £218.15 a week if you’re single or £332.95 as a couple or if you meet other criteria.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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This week, western allies are pledging fresh support for Ukraine. On Wednesday, US President Joe Biden announced another $425mn in military aid, rushed through before the election in November.

Separately, Australia announced it would send 49 of its old Abrams tanks. And with Volodymyr Zelenskyy, Ukrainian president, now touting a multi-part “victory plan” at an EU summit, more donations of equipment may materialise soon.

This is welcome — albeit shamefully far short of the support that Ukraine needs to win the war. However, as Zelenskyy begs for more help, there is another aspect of this that has hitherto been largely overlooked: the need for private and public capital for Ukraine’s own defence industry.

This matters because Ukraine’s homegrown military start-up scene has recently exploded in size and ambition: Oleksandr Kamyshin, a Zelenskyy adviser, tells me that there are now 200 ventures inside Ukraine which are capable of producing $20bn of equipment this year, and $30bn next.

Their products are not just innovative — artificial intelligence-enabled drones, for example — but also relatively cheap. Take an outfit called Madyar’s Birds, created by a former agricultural entrepreneur and politician called Robert Brovdi. The venture employs around a thousand people to make drones and shells inside Ukraine. “Items which cost the Americans $1,200 [to make] we do for $58,” says Brovdi. “Within six months the war will become pilotless, because we are using AI to replace human operators [of planes].”

However, Brovdi says he has a dire lack of working capital. He is not alone: Kamyshin says the Kyiv government is so cash-strapped that it only has $10bn of military procurement funds this year, creating a $10bn funding gap.

Is there any solution? The Ukrainian government recently started to consider lifting an export ban on its defence groups, in a desperate bid to raise their revenues. However this is potentially self-defeating, given that Ukraine’s army badly needs that kit. So a far more sensible solution would be for western allies to earmark some of the aid they are giving to Ukraine say from frozen Russian assets, to provide funding for its defence start-ups, on top of recycling old western kit. Such investments would not just help Ukraine but also help the west to rethink its own defence production.

This is critical. As former Google chief Eric Schmidt recently noted, the innovations emerging in Ukraine are changing the nature of war in a way that might make the expensive investments that western governments have hitherto made look increasingly redundant.

One country has already acted on this logic: Denmark recently agreed a DKK4.2bn investment in Ukrainian weapons and tech. Troels Lund Poulsen, Danish defence minister, says he now hopes to create a €1bn pan-EU fund. “It is much cheaper to produce [kit] here in Ukraine,” he told a conference in Kyiv last month. “The way forward is to encourage more European countries to finance production in Ukraine . . .”

There are hopes that this will eventually encourage private sector investment in Ukraine too. After all, TechCrunch calculates that $1bn of venture capital will be invested in Europe’s defence sector this year. But this still falls short of the VC funds being thrown into America, and 66 per cent of the funding for Europe emanates from American investors. However, defence start-ups are mushrooming in countries such as the UK and Germany.

And while European asset managers have traditionally shied away from defence investments, this attitude is now shifting slowly. The European Commission is encouraging this and a recent blog from the Principles for Responsible Investing group suggests that a third of European and UK-based ESG funds are invested in defence; it was a quarter in early 2022.

And Denmark recently pioneered another first: its pension funds are investing DKK40bn in Danish warships. This is striking, given the country’s long-standing ESG focus, and may encourage other European asset managers.

The other thing to watch, however, is the European Investment Bank. It currently focuses on civilian infrastructure projects. But, as Heidi Crebo-Rediker argues, the EIB could be a natural source of funding for Ukraine’s start-up defence scene — or it could be if European politicians accept the principle that defending Ukraine is crucial for the wider defence of Europe and its democratic ideals.

None of this will necessarily be much comfort for Zelenskyy right now. Even if European asset managers are becoming more willing to back defence investments, few would countenance doing that in Ukraine — at least not yet. And even if the EIB blazes a trail, as I think it should, that will take time.

But the key point is that America and Europe need to get more creative in how they support Kyiv. Where Denmark has gone, larger western states should now follow — not just for Ukraine’s sake, but for their own long-term security too.

gillian.tett@ft.com