Good morning and welcome to your Morning Briefing for Thursday 10 October 2024. To get this in your inbox every morning click here.

AJ Bell strengthens senior leadership team

AJ Bell has strengthened its senior leadership team with two appointments as it continues to grow.

Ryan Hughes joins as managing director of AJ Bell Investments, while Stephen Westgate has been hired as group corporate development director.

They will both report to AJ Bell CEO Michael Summersgill.

BareRock launches counselling and wellbeing programme

Professional Indemnity Insurance (PII) provider BareRock has launched a counselling and wellbeing support programme for its advice firm policyholders.

The programme aims to support the mental health and wellbeing of individuals within BareRock’s club member firms who are dealing with the strain of high-stress complaint situations, by covering the costs of professional counselling.

Under the new initiative, BareRock will fund up to 10 one-hour counselling sessions per claim, subject to a £2,000 cap.

If Starmer targets ‘the broadest shoulders’, most clients will be in his sights

It won’t have escaped your attention that the new Labour government’s first Budget falls on 30 October — the eve of Halloween – writes Money Marketing features editor Maria Nicholls.

Unlike the newspapers, I’ll spare you too many spooky puns, she says. But allow me just this little one: people are frightened.

Prime minister Keir Starmer and chancellor Rachel Reeves have warned of “pain” and “difficult decisions”. It seems they’re preparing us for the worst.

Quote Of The Day

It’s a push-me-pull-you month for inflation, which is likely to keep the Bank of England on track for a rate cut in November

– Sarah Coles, head of personal finance, Hargreaves Lansdown, assesses the situation ahead of the BoE decision next month.

In Other News

Canada Life has enhanced its parental and family friendly policies for staff within the UK and Isle of Man.

From 1 January 2025, Canada Life colleagues will be eligible for 26 weeks of paid maternity leave or 16 weeks of paid paternity leave, including adoptive parents and the parents of children born through surrogacy.

In addition, staff undergoing fertility treatment and their partners will be offered the opportunity to take an additional ten days of paid leave a year.

Canada Life is also introducing additional support for staff who have recently experienced pregnancy loss, offering paid time off to both parents during this difficult time.

The enhanced parental and family friendly policies will be available to Canada Life colleagues from their first day.

Evelyn Partners has appointed senior hire Vanessa Lee to its Northern private client tax team.

With more than 27 years’ experience, Lee has a focus on advising high-net-worth individuals, families, family offices and trustees on a wide range of complex tax and dispute planning.

She has previously held senior positions at leading professional services firms including BDO and EY.

Based in Evelyn’s Leeds office, Lee will also work with tax teams in Harrogate, Manchester and Newcastle on all aspects of private client tax and succession issues.

Head of tax at Evelyn Partners, Tom Shave, said: “Vanessa’s appointment comes at a time of significant growth and investment for Evelyn Partners’ professional services business.

“Our ambitions in the north of England are underpinned by the recent acquisition of Haines Watts offices in Leeds, Manchester and Newcastle.

“A key aspect of our strategy is in attracting senior talent like Vanessa who will bring a new dimension to our business.”

HSBC targets senior bankers in cost-cutting plan (Financial Times)

China steps up checks of wealth management products after $149bn outflow (Bloomberg)

Ukrainian patriotism and profits spur boom in war bonds (Reuters)

Did You See?

What are we to make of the news the Financial Conduct Authority is to review consolidation in the advice market? asks Nic Cicutti.

The regulator has written to advice and investment firm bosses noting an increase in the acquisition of firms or their assets over the past two years.

It warned that, while industry consolidation can provide benefits, various types of harm can occur where this is not done in a ‘prudent manner’.

However, Cicutti says, the FCA stepping in now “seems a spectacular example of shutting the stable door after multiple horses have bolted”.

“I think it’s a case of too little too late,” he added.

Read Cicutti’s full article here.

TSB has been fined for failing to ensure customers who were in debt were treated fairly.

The financial watchdog issued the bank a £10,910,500 penalty for its failures.

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The Financial Conduct Authority (FCA) said that the bank “lacked suitable systems and controls to secure fair outcomes”.

It stated that between June 2014 and March 2020, TSB‘s “inadequate processes” created a real risk that repayment plans were for customers in arrears were unaffordable.

The FCA claims that staff were potentially encouraged to prioritise the number of repayment plans made over taking enough time to assess individual customer circumstances.

Therese Chambers, joint executive director of enforcement and market oversight, said: “If you get into difficulty, you hope for – and we expect – fair treatment so a stressful situation isn’t made worse.

“TSB’s woeful systems and controls exposed its customers to risk of harm and meant it missed opportunity after opportunity to do the right thing.

“While it did take action, it took us instigating a review before it acted effectively to address all the issues.”

TSB has paid £99.9million in redress to the 232,849 mortgage, overdraft, credit card and loan customers affected.

It won’t have escaped your attention that the new Labour government’s first Budget falls on 30 October — the eve of Halloween.

Unlike the newspapers, I’ll spare you too many spooky puns. But allow me just this little one: people are frightened.

Prime minister Keir Starmer and chancellor Rachel Reeves have warned of “pain” and “difficult decisions”. It seems they’re preparing us for the worst.

Truthfully, what did you expect? The Conservatives were famously left a note by Labour when they took over in 2010, warning, “There is no money left.” Labour has hardly been left a better deal in return. With an enormous £22bn “black hole” in public finances to fill, things are bound to get ugly.

It is unclear if the government would implement changes immediately or defer them to the next financial year

The party has promised not to touch income tax, National Insurance or VAT but this leaves many options still open. Each has the potential to help fill the coffers but the pay-off could be huge in terms of backlash, complexity and unintended consequences.

Starmer says those with “the broadest shoulders should bear the heavier burden”, suggesting most clients will be affected. Advisers will need to be at the top of their game in the coming weeks, so let’s look at the biggest talking points.

Capital gains tax

The shortest odds are on a capital gains tax (CGT) announcement. Nine out of 10 advisers have reported growing concerns from clients ahead of a predicted hike in CGT rates in line with income tax, resulting in higher earners paying up to 45% on profits.

It is unclear whether the government would implement changes immediately or defer them to the next financial year. In the June 2010 Budget, rates were raised the following day.

Labour needs huge savings, fast — there’s no denying that. But big changes have long tails of consequences

“If the chancellor wants money as soon as possible, a deferral [to 6 April 2025] could actually deliver more in the short term,” says Technical Connection managing director Tony Wickenden.

Reports are already suggesting a selling ‘frenzy’ ahead of a potential announcement.

As always, it’s impossible to know at this stage whether any change will transpire, but Wickenden advises those already planning to make disposals in 2024/25 to act ahead of 30 October.

Inheritance tax

Politicians have tiptoed around inheritance tax (IHT) for years, with the Conservatives in particular fearing the reaction from their wealthier voters. However, while unpopular, the tax affects just 4% of estates.

With Starmer’s “broadest shoulders” pledge in mind, IHT looks ripe for the picking. That said, changes to the nil-rate band, reliefs or gifting allowances would require a delicate balancing act.

In contrast to its predecessors, it’s vital this government views pensions with a longer-term lens

“Wealthy individuals could move assets offshore to avoid it… and tinkering with reliefs available to farmland, private companies and AIM shares would provoke a reaction,” says AJ Bell co-founder Andy Bell.

Advisers should be wary of a ‘double death tax’, where CGT could be added to IHT, raising the total IHT burden to 54% for some, according to thinktank RSM.

Experts agree that clients should make the most of allowances on offer to them today.

Pensions

A Budget isn’t a Budget without whispers around pensions. Labour has committed to the triple lock, but there are questions over the exemption from IHT, as well as the 25% tax-free lump sum.

After years of speculation, it could also be time to accept a move to flat-rate tax relief, which could bring in £2.7bn per year, according to the Institute for Fiscal Studies. Reeves would have another unenviable tightrope to walk here.

“Assuming a 30% flat rate, basic-rate and non-taxpayers would benefit — but at the expense of higher- and additional-rate taxpayers,” says Aegon UK pensions director Steven Cameron.

Wickenden advises those already planning to make disposals in 2024/25 to act ahead of 30 October

For some, the ‘no regrets’ action may be to pay extra into their pension before the Budget.

In contrast to its predecessors, it’s vital this government views pensions with a longer-term lens. And this is true across the board.

Labour needs huge savings, fast — there’s no denying that. But big changes have long tails of consequences.

Can it resist the temptation of quick wins? There is a country full of futures depending on it.

Maria Nicholls is features editor

This article featured in the October 2024 edition of Money Marketing. 

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A MAJOR banking outage has left thousands of customers unable to access their accounts.

TSB customers are reporting difficulties logging into both the mobile banking app and Internet banking services this morning.

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Those needing to pay their bills or check that their salary has been paid into their bank account have been unable to do so since 7am.

According to DownDetector, over 2,035 users have encountered issues with the bank’s online services, preventing them from accessing their accounts or sending payments.

More than 60% of the reported problems pertain to difficulties with mobile banking, while 29% of users are experiencing trouble accessing Internet banking.

Frustrated TSB customers have taken to social media to express their concerns.

One person posted on X (formerly Twitter): “The mobile banking app is down again.

“I cannot get access to my accounts, and now it’s telling me I have no accounts with you.”

Another customer who can’t login to his mobile app said: “Not the ideal time for it to go down as I need to transfer money over ASAP to make a payment.”

Others have complained that they haven’t been able to check if their salary has dropped into their account.

“Well done, TSB. On my payday of all days when I need to pay all my bills, I can’t,” said one customer.

The outage seems to be impacting the TSB app and internet banking services.

Another frustrated customer said: “Why is the app not showing any accounts? And the website not loading?”

Responding to customer complaints, a TSB customer service operator said: “Hi. We’re aware some customers are experiencing issues with our online services.

“We’re sorry for the inconvenience, and we’re working to resolve this as soon as possible.”

A TSB spokesperson told The Sun: “We’re sorry that some of our customers are having issues accessing our services this morning.

“Our teams are working to fix this as quickly as possible.” 

Can I claim compensation for the outage?

Banks don’t have to pay out compensation to customers if there has been a drop in service, unlike how telecoms companies have to.

But if you have incurred costs as a result of service issues, it’s likely you could get your money back.

For example, if a bill payment didn’t go through as a result of an outage and you’ve been charged a fee for missing it, you should be able to claim that money back.

If your credit rating has been affected by a service outage, because you got a late payment fee after being unable to make a transaction, for example, you should also keep a record of this.

If you spoke to anyone to try and resolve the problem, make a note of their name and when you spoke to them, as well as roughly what you discussed and what they advised you to do.

You can find out more details about how to complain on the bank’s website.

It is worth gathering evidence of your problems so you can make a formal complaint to the bank directly.

What happens if my bank refuses to compensate me?

If you’re unhappy with how the bank dealt with your problem, you can contact the free Financial Ombudsman Service (FOS).

It is an independent body that will consider the evidence you present and make a fair decision about the action a bank should take.

The FOS can usually get involved 15 days after you’ve raised concerns with the bank.

In the case of an IT system outage at a bank, the FOS says any compensation depends on your circumstances and whether you lost out as a result.

If it thinks you did, it has the power to tell the bank to reimburse any fees, charges, or fines you were hit with, for example, if you were unable to make a payment on a credit card bill or to your mortgage provider.

It could also tell a bank to pay you for any money you didn’t receive, such as interest, if you weren’t able to pay money in.

If your credit score was affected, it may tell the bank to correct your credit file.

The FOS might also tell the bank to reimburse you for any extra costs you had to make, such as phone calls or trips to your local branch, as well as a payment for any inconvenience it caused.

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

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

AJ Bell has strengthened its senior leadership team with two appointments as it continue to grow.

Ryan Hughes joins as managing director of AJ Bell Investments, while Stephen Westgate has been hired as group corporate development director.

They will both report to AJ Bell CEO Michael Summersgill.

Hughes was made interim MD late last year and has now been permanently appointed to the role. He will join AJ Bell’s executive committee with immediate effect.

He first joined AJ Bell in 2016 and has played a leading role in the development and growth of its investment proposition.

Westgate’s previous role was at Deutsche Numis where he was managing director, head of financial institutions.

The newly created role of group corporate development director at AJ Bell will see him work closely with Summersgill and the executive committee to drive new strategic initiatives with the focus on continuing the company’s organic growth.

Prior to joining Numis in 2017, Westgate was head of group strategy and treasury at Man Group and has previously held roles at Deutsche Bank and Credit Suisse.

Summersgill said: “Ryan and Stephen’s appointments add further depth to our leadership team, bringing new perspectives and thinking to help develop our strategy and identify further organic growth opportunities for the business.”

BRITS could be slapped with a £25 billion tax bill if Labour wants to avoid austerity, leading economists have warned. 

The Institute for Fiscal Studies has claimed the Chancellor will have to dig deep into taxpayers’ pockets if she wants to keep spending promises without cutting public services.

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In their annual analysis, they argue even changing the debt rules won’t help, leaving the Chancellor facing what could be “the most consequential” Budget since at least 2010.

The new Labour government has already pledged in its manifesto to increase government budgets by £5bn and is spending £9bn to settle disputes with the public sector.

If Labour sticks to the spending plans set by the previous government in 2021, it would see a £17bn surplus.

But those plans are considered wildly unrealistic and would involve real term cuts to unprotected budgets.

With little support for more public spending cuts, the Chancellor could shield budgets from inflation, leaving her with a £1bn surplus.

But if she decides to maintain spending as a share of national income—which accounts for population growth—she’d face a £16bn deficit.

Adding this £16bn shortfall to the already promised £9bn in tax hikes would push the total tax increase to £25bn, driving the tax burden to a generational high.

IFS director Paul Johnson said: “The new Chancellor is committed to increasing investment spending, and to funding public services. To do so, she will need to increase taxes, or borrowing, or both.

“Taxes are at an all-time high, and she is tightly constrained by her pledges not to raise the main rates of income tax or corporation tax, or to increase National Insurance or VAT at all.

“The temptation then is to borrow more, perhaps changing the definition of debt targeted by the fiscal rules.

“But, given her pledge to balance the current budget, that would not free up additional resource for day-to-day spending and in any case is not risk-free given the dual deficits – that is, both budget deficit and current account deficit – being run by the UK.”

A Treasury spokesperson said: “It’s right to say that we have inherited a tough financial position, but we won’t let the challenges of the past define our future.

“Despite uncovering a £22 billion black hole in our public finances we are focused on making this the most pro-growth Treasury in history, built on the rock of economic stability, including robust fiscal rules that were set out in the manifesto. That is how we will fix our public services and deliver on the promise of change.”

A Treasury spokesperson said: “It’s right to say that we have inherited a tough financial position, but we won’t let the challenges of the past define our future.

“Despite uncovering a £22 billion black hole in our public finances we are focused on making this the most pro-growth Treasury in history, built on the rock of economic stability, including robust fiscal rules that were set out in the manifesto. That is how we will fix our public services and deliver on the promise of change.”

A Treasury spokesperson said: “It’s right to say that we have inherited a tough financial position, but we won’t let the challenges of the past define our future.
“Despite uncovering a £22 billion black hole in our public finances we are focused on making this the most pro-growth Treasury in history, built on the rock of economic stability, including robust fiscal rules that were set out in the manifesto. That is how we will fix our public services and deliver on the promise of change.”

A Treasury spokesperson said: “It’s right to say that we have inherited a tough financial position, but we won’t let the challenges of the past define our future.
“Despite uncovering a £22 billion black hole in our public finances we are focused on making this the most pro-growth Treasury in history, built on the rock of economic stability, including robust fiscal rules that were set out in the manifesto. That is how we will fix our public services and deliver on the promise of change.”

A Treasury spokesperson said: “It’s right to say that we have inherited a tough financial position, but we won’t let the challenges of the past define our future.

“Despite uncovering a £22 billion black hole in our public finances we are focused on making this the most pro-growth Treasury in history, built on the rock of economic stability, including robust fiscal rules that were set out in the manifesto. That is how we will fix our public services and deliver on the promise of change.”