Innehållsförteckning för Issue 991 från MoneyWeek

“When we look back, we will see this as a period of financial and political reset” Right now, the UK stockmarket is cheap. Our 15-year-average CAPE (cyclically adjusted price/ earnings ratio) is 13 times; our trailing p/e 14; our price to book 1.8 times; and our dividend yield 3.8%. Early this week, Schroders’ Duncan Stott calculated those numbers to be 11, 10, 1.2 and 6.8%. At any other time I would tell you to rush out and buy. Fast. Some analysts are doing just that. John Cronin of Dublin-based Goodbody reckons March 2020 may well go down in history as “one of the best all time opportunities to go long equities and banks particularly”. He isn’t alone: alot of the analysts we respect are starting to see value in the…

Art thieves stole three “high-value” Old Master paintings, including a Van Dyck, in a major burglary at an Oxford College, says Matthew Moore in The Times. Christ Church Picture Gallery is thought to be the only Oxbridge college to possess an internationally renowned Old Master collection. In what appears to be the highest fine for breaking quarantine, citizens in Western Australia who ignore a public health order relating to the coronavirus outbreak could be hit with a A$50,000 fine and spend up to 12 months in jail, says Eliza McPhee in the Daily Mail. In the north of Australia, Queenslanders could be fined up to A$13,345, while in New South Wales the penalty is up to A$11,000 and six months behind bars.…

What happens when a once-in-a-century pandemic hits an economy “saddled with record levels of debt”? In 2008 the problem was household and banking debt. Today it is corporations, says Ruchir Sharma in The New York Times. At roughly $16trn, US corporate debt is worth 75% of GDP, with the vehicle, hospitality and transport sectors looking especially vulnerable. One in six US firms do not generate enough cash flow to cover debt interest payments, says Sharma. They avoid bankruptcy only so long as they can secure cheap refinancing. Such zombies are “the natural spawn of a long period of record low interest rates”. Investors reaching for yield have been forced to put their money into bonds backed by ever riskier ventures. It’s not just America. The world’s $74trn “ocean of corporate…

Around two billion people will suffer from water shortages by 2030, says WirtschaftsWoche. That implies plenty of future business for France’s environmental services giant, Suez. It provides 135 million people with drinking water, making it the world’s biggest private supplier. The water resources division’s offerings also include wastewater management and re-use. The group’s other key division, also accounting for 40% of sales, is in a structural growth area too: rubbish collection and recycling. In 2019 Suez grew operating earnings by 4.6% to €1.4bn on a 3.6% rise in sales to €18bn. A cost-cutting drive designed to save €1bn and a juicy dividend yield of 7.2% are further plus points.…

At the start of the month the US economy was “humming” and President Donald Trump had every reason to be optimistic about his re-election prospects, says Sahil Kapur on NBC News. Now, the coronavirus outbreak has “challenged Trump as he has never been challenged before”. He has failed to get to grips with a complex problem that demanded “technocratic competence” and the virus weakens his two biggest assets — a growing economy and the approval of older folk. The crisis is also likely to benefit Joe Biden, Trump’s likely opponent, who people see as the safer pair of hands, according to polls. Most public-health experts agree that Trump “dropped the ball” in his response to the crisis by downplaying the threat to begin with then failing to begin mass testing,…

Coronavirus “has become a global pandemic, stockmarkets are crashing, credit is getting crunched and [SoftBank’s] share price is down 30%,” says Tim Culpan on Bloomberg. “So of course … Masayoshi Son would announce a share buyback.” The Japanese billionaire plans to have SoftBank – his sprawling technology conglomerate – buy back up to ¥500bn (£3.9bn) of its shares over the next year. The timing may seem odd, but Son has been under pressure from shareholders, including US activist Elliott Management, after some recent deals started to look unwise. Son made his name with a $20m stake in a small Chinese e-commerce firm called Alibaba in 2000. When Alibaba listed in 2014, that stake was worth $60bn. Ever since, investors have viewed him as a tech visionary. But recent investments –…

Pupils and teachers have faced disruption in Asia as schools have closed due to the spread of coronavirus. But there is at least a silver lining for tutors, say Emma Jacobs, Andrew Jack and Primrose Riordan in the Financial Times. One anonymous primary-school teacher in Beijing works eight hours a weekend at “her side hustle”, charging $80 an hour to teach maths. In so doing, “she earns almost as much again as her teacher’s salary”. The practice is officially forbidden in her state school. Yet some “super tutors” charge up to $300 for 45 minutes, while richer parents are willing to spend $10,000 a term in the build-up to the “pivotal” Gaokao exam, determining university admission. Parents in Asia are even turning to tutors overseas and online. Simply Learning Tuition,…

“Whatever it takes.” It’s the catchphrase of the moment. Everyone from UK chancellor Rishi Sunak to White House economic adviser Larry Kudlow has been using it. And little wonder. Those three magic words became famous when former European Central Bank governor Mario Draghi uttered them in July 2012, effectively ending the eurozone sovereign-debt crisis with his reassurance (or implicit threat) to investors that he would stop the eurozone from breaking up, no matter what. Global authorities are now facing a far more extreme crisis – and they’re pulling out all the stops. Welcome to the era of “helicopter money”. This week, as governments introduced increasingly tight measures to encourage “social distancing” and thus impede the spread of Covid-19, they also stepped up their spending plans for cushioning the impact on…

With the government recommending that we all avoid “non-essential travel” and offices where we can, more and more of us are going to be working from home. The good news is that the taxman and your employer should help you out with some of the additional expenses homeworking creates. Here’s what you need to know. Claim the homeworking allowance If you and your employer have agreed that you are going to work from home regularly you can claim a homeworking allowance. This is tax-free and paid by your employer. “Reimbursements can only cover reasonable additional costs incurred by any homeworking employee,” says Kaisha Langton in the Daily Express. The allowance covers extra heating and lighting costs, additional insurance you might require, increased water bills and telephone and broadband charges. It…

Ministers hope Budget measures announced last week will solve the row over tax on pension contributions that has prompted senior doctors to refuse extra work or even to retire early. But the changes don’t only apply to NHS staff. Anyone previously caught out by complicated rules that reduce pension contribution allowances for high earners could benefit. The problem centres on the annual allowance: the amount that savers may pay into their private pensions each year. For most people, the cap is £40,000 or your annual earnings if this sum is lower; go over this allowance and you face punitive tax charges. But many high earners only qualify for a reduced annual allowance. Their maximum contribution tapers down according to their income, potentially to as little as £10,000. Reform or scrap?…

You might not be able to shield your shares from a falling stockmarket. But you can at least protect your investments from the taxman with a stocks and shares individual savings account (Isa). The Isa “wrapper” is a tax-efficient way to invest in shares, unit trusts, investment trusts, exchange-traded funds (ETFs), open-ended investment companies (Oeics), real estate investment trusts (Reits), and both corporate and government bonds. You can even park your cash here while you’re scouting around for what to buy next. Just be aware that, depending on your provider, you may not earn interest on your cash while you decide what to subsequently invest in. That’s what cash Isas are for. Still, with a stocks and shares Isa, you won’t pay any capital gains tax (CGT) on your investments.…

With just a few weeks remaining of the 2019-2020 tax year, everyone is rushing to take advantage of their individual savings account (Isa) allowance. But have you thought about putting as much as possible in a pension plan? If not, you’re missing out on valuable tax breaks that can make a huge difference to your standard of living later in life. For most people, the rules on maximum contributions mean it is possible to save more in a private pension each year than in an Isa. Your annual allowance in a pension is usually £40,000, or your total earnings for the year if this figure is lower, as opposed to £20,000 in an Isa. The rules are more restrictive for very high earners – those on more than £150,000 a…

Eight years ago we decided that we should spend a little less time carping from the sidelines about other people’s investment decisions and a little more making some of our own. So we created a long-term portfolio for our readers. We wanted it to be active without requiring too much action. We wanted it to be geographically and sectorally diverse without deviating too much from the mainstream. And of course we wanted it to be inexpensive: nothing kills investment returns faster than high costs. With advice from a few experts (Simon Elliott of Winterflood, my husband Sandy Cross of Rossie House and Alan Brierley of Investec) we settled on a small group of investment trusts as our core holdings. Why investment trusts? Several reasons, mostly to do with structure. An…

If you want to grab investors’ attention these days you need a catchy acronym or buzzword. “Ethical investing” is pretty self-explanatory. It has also been knocking around for ages. So someone decided it needed a reboot for the 2020s and we got ESG, which stands for environmental, social and governance. It is a mantra that allows today’s on-trend investors to feel Ever So Good about themselves, judging by the burgeoning popularity of this style of investing. The value of global “sustainable investments” grew from $13.3trn in 2012 to $30.7trn in 2018, according to the Global Sustainable Investment Alliance. Credit Suisse puts the 2020 figure at $40trn. But what does it really mean? That is a good, if awkward, question, because nobody can quite agree. As John Stepek notes in Money…

One way adults can save on behalf of a child is with a junior individual savings account (Jisa). As with adult Isas, growth in a Jisa is completely free of tax. There are just two key conditions. Firstly, any money paid into a Jisa can’t be accessed until the child turns 18. Secondly, the annual Jisa allowance is a lot lower than the adult Isa limit. It is currently £4,368 – but this sum soars to £9,000 from 6 April 2020. If you invested the full new amount each year from birth – and it grew by 3% a year – your child would have £218,000 on their 18th birthday. And at that stage, the Jisa automatically converts into an adult Isa. So the minute they could start earning more…

“The mad Swedish supercar scientists at Koenigsegg are known for making ludicrous, limited-run, high-performance vehicles such as the absurd 1,500-horsepower Regera… or last year’s 300mph missile, the Jesko,” says Sean O’Kane on The Verge. But their latest creation, the 2021 Gemera, “takes the absurdity to another level”. It packs 1,700bhp, 2,580lb ft of torque and the ability to go from 0-62mph in 1.9 seconds and on to a top speed of a record-matching 250mph. Weirdly, it is also a “family car”. It has four seats, cup holders, and enough room to store “carry-on luggage”. In other words, it is “absolutely mind-blowingly nuts”, says Vijay Pattni for Top Gear. But “what else would you expect from Koenigsegg”? “The car has three electric motors and a 2.0-litre twin-turbo engine that can run…

• Sean Connery never complained about being cast as James Bond, says Jan Moir in the Daily Mail. “Timothy Dalton and George Lazenby were just grateful for their five minutes of fame.” Roger Moore was too much of a gent to whine. And Pierce Brosnan would be “the last man on earth” to do it. Yet the current incumbent, Daniel Craig (pictured), “never stops moaning”. Honestly. You pay a bloke £39m to play Bond, you expect him “to get on and take his top off without complaint”. “Last time around Dour Daniel said he would ‘rather slash his wrists’ than do another Bond film. This time he has been complaining that it is all getting too much and whining on about his knees, like some boring old geezer.” But the…

Spain’s King Felipe VI has renounced the inheritance of his “scandal-hit” father Juan Carlos, says the BBC. The palace said in a statement that Juan Carlos, who abdicated in 2014, would also stop receiving an annual grant of €194,000 (£174,800). The move came after the 82-year-old former king was heavily criticised for his “lavish lifestyle”. Juan Carlos, who reigned for 39 years, is also facing an investigation by the Swiss financial authorities and reportedly received $100m from Saudi Arabia in 2008 via an offshore account. King Felipe VI, 52, is trying to distance himself from his father’s affairs by giving up the money. For a long time, Spaniards held Juan Carlos in high regard for shepherding the country into democracy following the death of dictator Francisco Franco, says Jack Guy…

“Get ready for the Covid-19 global recession”, says Larry Elliott in The Guardian. With mass gatherings prohibited, borders closing and countries in lockdown the world economy is in line for a deep slump. On Sunday central banks in Europe, Asia and North America announced coordinated action to prevent liquidity from drying up. America’s Federal Reserve slashed interest rates to nearly zero and pledged $700bn in new asset purchases (with printed money). A terrifying plunge These measures failed to reverse the market rout. On Monday both the Dow Jones and S&P 500 recorded their biggest one-day falls in over 30 years, as both tumbled more than 12% in a single day. The VIX measure of market volatility, the so-called “fear gauge”, topped a record set in 2008 when it closed on…

The equity market slump has “shut down the spring IPO [initial public offerings] market” in the US, says Maggie Fitzgerald in CNBC. Warner Music, Madewell (a denim brand to be spun off from clothing group J Crew) and home-rental group Airbnb are among the firms that have already shelved, or are expected to delay, their IPOs. But some “virus-proof” firms have done well, notes Kathleen Smith of Renaissance Capital. Passage Bio, a genetic medicine outfit, gained 23% on its debut last month. “Quarantine-friendly companies” such asremote work-enablers Slack (“WhatsApp for companies”) and Zoom Video, which both floated in 2019, have also outperformed the broader market.…

Shares in JP Morgan (JPM), like most equities, have been “pummelled” in the past week, says Hugh Son on CNBC. But investors received arare bit of good news when it was revealed that CEO Jamie Dimon (pictured) has returned home after successful emergency heart surgery. While Dimon, who is the “longest-tenured CEO of an American megabank”, is expected to return to his job later this year, the incident has “sparked discussion about potential successors”. It’s not surprising that investors are anxious about Dimon’s health, says The Economist. Over 15 years Dimon “has built JPM into the world’s most reputable bank”. It is America’s biggest by assets and its “most profitable”, last year “breaking the world record for bank earnings in a single year”. While Dimon has been “lucky”, with JPM…

In the middle of a major market panic when all your investments are plummeting in value, the last thing that you want to worry about is whether what remains of them is safe. But anybody who’s been investing for a few years will know that, from time to time, stockbrokers, wealth managers and other investment firms fail. And crises are often accompanied by at least one such blow-up (although small brokers go under frequently enough anyway – the most recent example was SVS Securities in August last year). So if you’re wondering what rules exist to protect your investments, here’s a quick outline. “Clients’ assets must be segregated from the firm’s own assets” The key point is that investments you hold through properly regulated UK investment firms should be held…

It was hardly the best week to be starting as the new governor of the Bank of England. When he was appointed to the job Andrew Bailey probably didn’t expect to have to be dealing with a global pandemic that has plunged the economy, alongside the healthcare system, into an unprecedented crisis and coming up with solutions for the financial and commercial fallout as millions of people stay away from shops, offices and restaurants. His officials may well have to devise some form of emergency helicopter money to keep cash flowing as work comes to a stop, or organise a bail-out or two. Despite these challenges, he should also think about the medium term. The pandemic will pass, as they generally do, and he will need a strategy for the…

Britain’s got talent for science Dr Thomas Fink The Spectator Britain has an “uncanny aptitude” for basic science, says American physicist Dr Thomas Fink. The Royal Institution alone has earned more Nobel prizes than Russia. Basic science – or “curiosity-driven research” – done without consideration of its usefulness, consistently leads to the “most far-reaching breakthroughs”. Newton’s laws of motion led to accurate ballistics; describing the “intricate distribution of the primes” to modern encryption. Scientists spot patterns. It is only once these patterns have been identified that they can be “harnessed to solve problems”. This sounds obvious, but is not always understood. Horizon 2020, the EU’s research-funding agency, mainly supports outcome-led investigations: “they are seeking the applications of patterns that have yet to be spotted”. Last week’s Budget, which pledged to…

If there is one sector that will surely emerge from the coronavirus pandemic in stronger shape, it is healthcare. Increasing global prosperity, scientific advances and the consequent steady increase in demand have made this one of the top growth sectors, although regulation and politics have often got in the way. As a result, it has been a sector that hasn’t quite lived up to its promise. Growth on the cheap In a note earlier this month, US investment strategist Ed Yardeni pointed out that the healthcare sector in the US, which dominates its global counterparts, traded on a 15% discount to the S&P 500 based on forward price/earnings (p/e) ratios, having underperformed by 10% since the start of 2018. Yet earnings growth, 16% in 2018, nearly 10% in 2019 and…

The first point to acknowledge about investing right now is that it is unnerving. This crisis is worse than 2008 (itself the worst anyone had seen since the 1930s) and it’s still unclear how long it will last. On the good news front, cases seem to have peaked in the countries that were hit earliest – among them China, Hong Kong and Singapore – and even Italy is showing signs of the rate of infection flattening out. Work on a vaccination also appears to be progressing rapidly. On the bad news front, most other major developed economies still have to go through the worst (what will investors’ sentiment be like when cases explode in New York and London?), recession is now a raging certainty and we have no idea what…

What’s happening to interest rates? Last week’s announcement that the Bank of England was slashing the base rate from 0.75% to 0.25% is good news for many mortgage holders, writes Ruth Jackson-Kirby. Several big banks including Santander, Lloyds and Halifax swiftly moved to cut their own rates to reflect the drop. Homeowners on a tracker mortgage or their lender’s standard variable rate should see a fall in their repayments from April. Should I remortgage? Nonetheless, the drop in the base rate doesn’t mean now is the time to remortgage. Some top lenders have actually hiked rates on their fixed-term mortgages, as Adam Williams points out in The Daily Telegraph. HSBC has increased the rate on its fixed-rate mortgages by as much as 0.1%; Accord Mortgages and Leeds Building Society have…

Navinder Singh Sarao was born in Hounslow, west London, in 1979. He graduated from Brunel University and took a job at Futex, a trading firm that allowed workers to trade with the firm’s own money in return for half of the profits. Sarao enjoyed huge success, but was unhappy with handing over a share of his winnings, so he moved to another trading house, CFT Financials, in 2008, buying a seat on the Chicago Mercantile Exchange (CME) in order to cut trading costs. What was the scam? A chunk of Sarao’s earnings came from “spoofing”, aform of market manipulation. He would place trades in e-mini S&P futures (a financial instrument based on the price of the S&P 500), cancel them before they could be filled, then profit from the resulting…

For larger amounts: Halifax-owned iWeb (iwebsharedealing.co.uk) charges £25 to open an account. After that, you pay just £5 per trade. For smaller amounts: Vanguard (vanguardinvestor.co.uk) charges 0.15% a year, capped at £375. Investors can choose from its range of 70 mostly passive funds, or opt for a ready-made portfolio.Trading is free (or £7.50 to trade at specific times).The minimum monthly investment per fund is £100. Frequent trading: MoneyWeek advocates investing for the long term: you can ride out downturns and reduce trading costs. But if you are inclined to trade often, then consider BestInvest (bestinvest.co.uk). It charges 0.4% a year for amounts up to £250,000, 0.2% up to £1m, and nothing over that. Buying and selling funds is free and online share dealing costs £7.50 a trade.…

Which Sipp offers you the best deal depends on the value of your savings and the investments you want to hold. Consider the following: Cheap Sipps for savers using funds Analysis by financial advice website Moneyto themasses.com suggests that new industry entrant Vanguard offers the cheapest Sipp for investors who simply want to invest in funds via their pensions. On a pension fund worth £100,000, its costs work out at just £150 a year (assuming ten fund switches a year). The next cheapest deal, from Close Brothers Asset management, costs £250 a year. Vanguard will only offer investors its own funds, however, which is not the case elsewhere. It is also good value for larger pension fund sizes, charging £375 on a £1m pot. But at this size, iWeb and…

Meet Lisa, the often-overlooked member of the individual savings account (Isa) family. Introduced in April 2017, lifetime individual savings accounts (Lisas) were aimed at two quite different audiences – first-time homebuyers and people saving for retirement – and received a mixed reception. But the accounts do have their merits. You can open a Lisa at any time between your 18th and 40th birthday, paying in a maximum of £4,000 a year, which counts towards your overall annual Isa allowance of £20,000. In addition, the government tops up your contributions with a generous 25% bonus –worth up to £1,000 on the maximum annual investment – and your savings grow free of tax. What’s the catch? The catch is that there are strict rules on when you can cash in your Lisa.…

2018 Saint-Joseph Blanc, Lieu-Dit, E. Guigal, Northern Rhône, France £39, noblegreenwines. co.uk; £35.95, farehamwinecellar.co.uk; £39.50, Fenwick Newcastle, 0800-783 1783. Every so often a bottle of white Rhône sneaks up on my palate and completely blows me away. While white Graves always loiters with intent, never really hitting the high notes cleanly, and top Alsatians impress once every blue moon, it is the Rhônes that stick in my mind and make me wish I had bought a case and not a bottle. I am not sure why marsanne and roussanne, in the right hands, have the ability to confound the senses. I handed a 19/20 score the other day to my featured wine. I had just tasted the always excellent 2017 Guigal Côtes-du-Rhône Blanc (£13.50, noblegreenwines.co.uk; £12, selected Tesco), which, on…

Good news at last for philatelists – stamps were the second-highest-rising collectable asset of 2019, rising by 6%. That market has been in a slump for the past few years, so 2019 might just have heralded a turnaround for these once-popular collectables. We’ll have to wait and see. Over ten years, the market has only grown by 64% – not much compared with other collectable assets, such as whisky and classic cars. That said, classic cars (and jewellery) were last year’s biggest losers, both down 7%. The signs were there, particularly for cars. Values had risen by 194% over ten years (again, according to Knight Frank), but the demand failed to turn up at the calendar highlight that is Monterey Car Week, in California, last August. Surprisingly, whisky “only” grew…

The coronavirus crisis continues to grip the world… the markets continue to discover and adapt. Mostly, what they are discovering is that companies are worth less and bonds more than they were a few weeks ago. The authorities continue to react, resist and panic – they might not be able to do anything to stop the virus, but they might be able to get stock prices up! And people get along as best they can. The wealthy retreat to their country houses and work online. The rest continue to show up. Bloomberg asked cart vendor Mohammed Abdrabou in Manhattan what would happen if the stockbrokers, clerks, and accountants stopped coming to the office. “I would get no business,” he said. “That would be very bad. I have a wife, kids,…

Seven siblings will be able to forgo fighting over their late father’s estate after a McDonald’s napkin was formally recognised as his last will and testament by a Canadian court, says Will Pavia in The Times. Philip Langan, who died aged 80, scrawled his children’s names alongside the instruction to split his property evenly when he thought he was having a heart attack and later gave it to one of his daughters for safe keeping. UK record-label revenue hit fresh highs of £1.1bn, driven by the continued growth of streaming and investment in new music, says James Warrington in City AM. The figures mark the fourth consecutive year of growth and the highest level of annual revenue in over a decade.…

Is China a safe-haven? Stocks in the country where the coronavirus originated have dodged the worst of the falls on Western indexes. The Shanghai Composite index is down by less than 10% since the start of the year, compared with 29%-33% losses in the US and Europe. China is gradually getting back to work but with tough restrictions, say Ryan McMorrow and Qianer Liu in the Financial Times. Employees often have their temperatures taken multiple times per day and most companies are only allowing about half of their workers back into the office. Compulsory face mask wearing remains common.“Halting the world’s second-largest economy has proved easier than restarting it,” writes Keither Bradsher in The New York Times. Most factories have reopened but are operating at two-thirds of their capacity, while…

Three to buy Oford Metrics Investors Chronicle The once niche field of movement tracking is entering the mainstream as smartwatches and fitness trackers become more popular. Aim-traded Oxford Metrics is the world leader in “high-precision motion measurement analysis” through its Vicon division. There are opportunities in fields as varied as medicine, films and virtual reality. Even space agency Nasa is a client. A robust net cash position leaves Oxford Metrics well placed to grow through acquisitions. Strong forecast earnings growth and a varied client base make this a longterm buy. 109p Polymetal International The Sunday Telegraph FTSE 100 investors in search of a “counterweight” to the market slump don’t have many ways to gain exposure to the gold bounce. Russia and Kazakhstan-focused Polymetal is the index’s “only precious metals…

• The Covid-19 outbreak has been good news for online retailers Amazon and Ocado, says Simon Duke in The Times. There has been a “surge in demand”, especially for groceries and everyday staples, as shoppers stock their larders before potential self-isolation. Shortages in supermarkets have also boosted orders. Amazon has become worried about strains on its warehouses and delivery network, and will hire an additional 100,000 workers. Ocado’s shares have also provided a “rare safe haven” during the current market turmoil, rising 8% since the start of this year. • The idea of Apple buying Disney “simply won’t go away”, says Eric Savitz in Barron’s. Former Disney CEO Robert Iger (pictured) has suggested “the two sides might have merged” if Apple founder Steve Jobs, who also served on Disney’s board,…

Dennis Kowalski, president of the Cryonics institute in Michigan, suggests that we chill out about life after death, says Catherine Nixey in The Economist’s 1843 magazine. He specialises in cryonically preserving humans in refrigerators at temperatures of -196°C. They are to stay frozen until the technology has been developed to bring them back to life. Around 180 “refrigerated humans” are already in his care and more people are signing up each year. Cryonics is a very “rational thing to do”, assures Kowalski. For a cool $28,000 per person, patients can be frozen for “potential” resurrection. The Institute makes no guarantees you’ll be brought back, “though it’s unlikely many customers will complain”. The institute offers family discounts, while other centres “allow you to do a ‘neuro’ and freeze only your brain”.…

The Financial Services Compensation Scheme (FSCS) covers both banks and building societies as well as investment accounts. If a bank goes bust the FSCS will pay compensation of up to £85,000 per person, per bank to cover any losses (or up to £1m if the money is there temporarily – such as the proceeds from a house sale – for up to six months from when the amount was deposited). So if you have substantial cash savings, you may want to have accounts with more than one financial institution. But if you split your savings like this to maximise your FSCS cover, be aware that many bank brands share the same bank licence, so check you are genuinely saving with two separate institutions. Bank and building society failures are urgent…

• Disney’s former chief executive Bob Iger (pictured) received $47.5m for last year. But 46% of shareholders voted against the executive pay plan last week in a non-binding vote. It’s not the first time Disney has faced sharp criticism over pay, says Reuters. In 2017 a majority of shareholders opposed the plans. Iger, who stepped down as CEO last month, but remains at Disney in the post of executive chairman, was paid a total of $65.6m in 2018, an 80% increase on the previous year. • Mining giant Rio Tinto has agreed to pay its former chief executive, Sam Walsh, almost A$7m (£3.5m) in deferred bonus payments as part of a “confidential and binding dispute resolution process”, the chairman, Simon Thompson, said. The payments to Walsh from performance-based incentive schemes…

“I haven’t known. Partly because it didn’t feel like that was a fight that could have been won. I have known recently that I’ve been paid the same and more. So, that’s good. I’ll take that.” Film star Keira Knightley (pictured) on whether she has ever been underpaid compared with a male peer, quoted in the Financial Times “Toilet roll £629pp. Comes with a free holiday to New York.” A poster in a travel agent’s window in Surrey, quoted in The Mail on Sunday “All great economists are tall. There are two exceptions: John Kenneth Galbraith and Milton Friedman.” US Nobel Prize-winning economist George Stigler, quoted on Reddit.com. Galbraith was 6ft 9 inches and Friedman 5ft “They made a billionaire homeless today. I’m alittle bit ticked off that they chucked…

American oil and gas firm Occidental Petroleum has launched a poison pill defence in the latest round of its ongoing row with activist investor Carl Icahn. The plan would give investors who held shares in the firm additional stock in proportion to their holdings as of 23 March if anyone subsequently buys a stake of more than 15% (thereby diluting anyone who tries to build up a large position after that date). Icahn, who recently raised his investment in the firm from 2.5% to 10%, has been highly critical of Occidental’s management, calling its $37bn purchase of rival Anadarko Petroleum last year “one of the worst disasters in financial history”. He described the poison pill as “a travesty of corporate governance”.…

The effects of the coronavirus are now being felt far and wide. Many of us have had to cancel holidays or are worrying about upcoming trips. At the same time the travel industry is reeling from travel restrictions and insurers are trying to minimise their losses. So, where does that leave your right to a refund? The situation is changing all the time, but this week the government asked that we avoid all non-essential foreign travel for the next 30 days. That means if you have an international trip booked that departs in the next month you can get help from your airline or travel firm. They have a duty to offer you either your money back or an alternative trip. You should speak to your travel provider rather than…

The airline industry has borne the brunt of the financial fallout from the coronavirus. Countries around the world have imposed various degrees of restrictions on flights, from screening and quarantines to outright bans; even where planes are still allowed to fly, demand has fallen so far that airlines have voluntarily cancelled flights. “This is a crisis much worse than Sars in 2003 or the 2008 global meltdown” The industry seems to be facing a crisis much worse than the 2003 outbreak of Sars or the global financial crisis of 2008/2009. Indeed, some experts are predicting that, unless things improve, the entire industry could find itself bankrupt by May. A nosedive too far It is no surprise, then, that shares in International Consolidated Airlines Group (LSE: IAG), the parent company of…

It’s individual savings account (Isa) season again: the time of year when millions of us scramble to put our savings beyond the reach of the taxman before we lose our annual allowance with the dawn of the new tax year on 6 April. The popularity of cash Isas has fallen in recent years as the arrival of the personal savings allowance (PSA) in 2016 began to erode their appeal. The PSA allows basic-rate taxpayers to earn £1,000 in interest on their savings every year before income tax becomes due. For higher-rate taxpayers the PSA falls to £500, while additional rate taxpayers get no PSA. So a basic-rate taxpayer can save up to £100,000 in an account paying 1% interest before they will have to pay tax on the returns. As…

Innovative-finance Isas (IFIsas) were introduced in April 2016 as the alternative-finance sector began to establish itself. They provided a way for investors to diversify out of traditional investments and into the exciting new world of crowdfunded property, peer-to-peer (P2P) business loans and renewable energy bonds, for example. They offered far more enticing returns –around 15%, often – than you could find elsewhere. Nonetheless, IFIsas haven’t exactly set the world alight. The total number of Isa accounts subscribed to in 2017/2018 was 10.8 million, counting cash Isas and the stocks and shares version, according to HMRC. Compare that to IFIsas. The Peer-to-Peer Finance Association (P2PFA), a trade body, said that the value of assets held in IFIsas had “nearly doubled” in the six months to the end of August 2019, when…

If you have used up your annual individual savings account (Isa) and pension savings allowances and are looking for a more adventurous type of tax-efficient investment, venture capital trusts (VCTs) and the enterprise investment scheme (EIS) could be for you. Both offer generous tax breaks to encourage investors to put their money into small, early-stage businesses with the potential to deliver exciting longterm returns. But these ventures also carry an elevated risk of outright failure. VCTs are collective investment funds run by professional managers with specialist experience investing in early-stage firms. They must put at least 70% of the money they raise into qualifying companies within three years of launch. Usually, these have to be worth less than £15m, have fewer than 250 employees and be less than seven years…

One of the big benefits of individual savings accounts (Isas) is that you don’t pay tax on any capital gains, dividends or interest. What’s more, unlike with personal pensions, there are no taxes on withdrawals. This has made these accounts popular with investors of all ages, including those over 65. However, many are not aware of the fact that “unless you pass an Isa on to a spouse on your death, those who inherit the pot could lose 40% of those funds to inheritance tax (IHT)”, says Alex Davies, CEO and founder of Wealth Club. Even when the Isa is passed on to a spouse the estate will have to pay a marginal rate of IHT of up to 40% when they die – so it’s only deferred, not cancelled.…

With Lisas marketed as retirement savings vehicles, an obvious question is whether they’re better than a private pension. In most cases they’re the inferior choice (though there’s nothing to stop you having both). Lisas do have certain advantages. The cost of getting £100 into your Lisa is £80 after the government bonus, which is also what it costs a basic-rate taxpayer to contribute £100 to a pension after tax relief. The money grows tax-free in both accounts, but on retirement all of the Lisa money can be withdrawn with no further tax to pay, while 75% of the pension savings will be taxable. Against that, however, anyone with a pension at work will get additional contributions from their employer, putting them ahead of Lisa savers. Also, anyone in the higher-…

No longer mere fashion accessories and Margaret Thatcher’s weapon of choice, handbags are this year’s darlings of the collecting world. So says the oft-quoted 2020 Wealth Report from Knight Frank. The value of handbags rose by 13% last year, the most of any collectable asset class (see box on the right for the others). That was also slightly better than the 12% the FTSE 100 managed for 2019 – remember those days? Of course, expensive handbags have been around for at least as long as there have been chihuahuas to put in them. But as a collectable, they’re relatively new to the scene. And, until very recently, there hasn’t existed any index to track prices. So Art Market Research (AMR), the company that supplies Knight Frank with data for its…

£200bn The estimated value of unclaimed financial assets in Britain, such as forgotten shares. The government is considering extending a scheme that sees the Reclaim Fund requisition dormant bank deposits to include company share registers. A portion is given to charity. £1trn The size of the British state following Chancellor Rishi Sunak’s planned rise in public spending, announced in the Budget last week, according to the Resolution Foundation, a think tank. Spending is set to rise by £203bn, and public debt will hit £2trn by 2025. €3m The value of Nature Morte, a painting by Pablo Picasso from 1921, which is the prize in a lottery in France. Each of 200,000 tickets costs €100. Assuming all tickets are sold, €1m will go to the painting’s owner, billionaire collector David Nahmad,…