UK Dividends Set New High

Whilst 2018 may not have been the best year for share prices, it was a very good year for dividends. A new report shows that UK dividends reached a record high of £99.8bn, the highest level since the global financial crisis. This was due to a number of factors, including soaring company profits, special dividends and a slump in the value of sterling.

Pension Withdrawals Hit Record in Q4 2018
Payments made under the pension reforms of 2015 have steadily climbed and hit 628,000 in the final quarter of last year, up from the 121,000 in the second quarter of 2015 when the reforms took effect. Interestingly, the average withdrawal dropped to a record low of £7,197 in Q4, down from £7,597 in the previous quarter. This could be a sign that people are sensibly conserving their pension wealth.

Orkney Rated Britain’s Best Place to Live in Terms of Quality of Life
The Halifax’s annual quality of life survey shows that Orkney is rated the best place to live in Britain. Not only is employment at 88%, the average house price is just £173,349. Residents also enjoy good health and low crime rates.

Department for Work and Pensions Report on Auto Enrolment
This research confirms that the pension message is being heard. The amount of money going into pensions through auto enrolment is up over £4bn in a year, showing that the increase in contribution rates hasn’t put people off saving for their retirement.

Women’s Retirement Age Rising Faster Than Men’s
On average women now work until they are 64, a jump of 3.3 years since 1989, partly due to the controversial rise in women’s State Pension age currently under way. Exit from the labour force for men comes at around 65. Figures from the DWP show that 10.4% of individuals are working beyond age 65, double the number in 2000; since 2011, employers have not generally been allowed to force retirement at a specific age.

35 Years of the FTSE 100
Research shows that £100 invested in the FTSE 100 index at its inception in 1984 would be worth more than £1,700 now * (without adjusting for the effect of inflation) if dividend income had been reinvested. The same £100 left in an easy-access savings account over the same time period would be worth just £340.

Scams Update – New Warnings Issued
January saw the introduction of the long-awaited ban on nuisance calls about pensions. Those who flout the cold-calling ban face a potential fine of £500,000. According to data released by the FCA (compiled by Action Fraud), there was £197 million of reported losses last year.

Pension scams can have devastating outcomes, with fraudsters conning victims out of thousands of pounds worth of savings. Scammers stole an average of £29,000 per victim last year, according to data compiled by the Financial Conduct Authority. The total figure is based on frauds reported; it’s thought the actual sum could be substantially higher as many people feel ashamed of being conned and don’t report their loss.

What to Look Out For:
Members of the public are still being urged to stay alert, as cold-calling is only one of the ways that scammers use to search out their victims. Pensions remain a tempting target for fraudsters and some will inevitably look to find a way round the ban or simply ignore it altogether.

Authorised Push Payment Scams
These involve fraudsters convincing victims to move money from their bank accounts into the fraudster’s account. Often the caller impersonates a bank employee and requests that you move money to another account for your own safety. The caller can be very convincing and will sound as if they are genuinely trying to help you. In many instances victims have been persuaded to divulge their pins, usernames and passwords, something that your bank would never ask you to do.

There have been appeals for government to work with the finance industry to put additional safeguards in place; in the meantime, everyone needs to redouble their efforts to protect their personal financial data.


*Salary Finance, Nov 2018