The Briefing on Tuesday 20th February 2018

In this edition of The Briefing from Informed Choice on Tuesday 20th February 2018 – millennial income gains stall, £6.2m fine for William Hill, pre-tax profits jump for HSBC, Labour leader wants to curb City power, and debtors chasing people with mental health issues.

 

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Millennial income gains stall

The 20th century growth story of each generation enjoying a higher income than the one before has ground to a halt in nearly all advanced economies in the 21st century. This is according to a new report from the Resolution Foundation. The report finds the UK stands out for having experienced a ‘boom and bust’ cycle with strong income and housing gains for post-war generations failing to materialise for millennials.

The report, called Cross countries, is the fifteenth to be published for the Foundation’s ongoing Intergenerational Commission. It looks at household living standard changes for different generations across eight high-income countries and finds that the global financial crisis has had a profound effect in halting generational income progress.

On average, across the countries featured in the report, millennials in their early 30s have household incomes 4% lower than members of Generation X at the same age. In comparison, the incomes of Generation X in their early 30s were 30% higher than the baby boomer generation before them.

Daniel Tomlinson, Policy Analyst at the Resolution Foundation, said:

It’s no secret that the financial crisis hit the vast majority of advanced economies hard, holding back millennial income progress in countries around the world. But only Spain echoes the UK experience – a ‘boom and bust’ income cycle where significant generation-on-generation gains for older generations have come to a stop for younger people. The UK also stands out for combining this lack of income progress with major declines in home ownership for today’s millennials.

£6.2m fine for William Hill

Bookies William Hill have been fined £6.2m for breaching anti-money laundering and social responsibility regulations. The penalty package imposed by The Gambling Commission came with a statement the firm did not do enough to ensure prevention measures were effective.

Ten customers of William Hill were able to deposit money linked to criminal offences. The gambling firm was found to have not done enough to determine the source of the money or understand if the customers were problem gamblers.

It’s the second largest penalty imposed by The Gambling Commission, after a penalty of £7.8m imposed against gambling firm 888.

The Gambling Commission said William Hill’s senior management: “failed to mitigate risks and have sufficient numbers of staff to ensure their anti money laundering and social responsibility processes were effective”.

Pre-tax profits jump for HSBC

Banking giant HSBC has reported a pre-tax profit of £12.3bn for 2017, with growth driven by its focus on Asia. Despite being known as a UK High Street bank, HSBC generates the bulk of its profits overseas. The pre-tax profits were up 141% on the previous year, when it incurred a series of one-off costs including the sale of its Brazil operation.

HSBC group chairman Mark Tucker said:

A large increase in reported profit before tax reflected both a healthy business and the non-recurrence of significant items from 2016.

Labour leader wants to curb City power

Labour leader Jeremy Corbyn has vowed to take on the City of London should he become prime minister, calling finance “the servant of industry, not the masters of us all”. At a speech to the EEF manufacturers’ organisation later today, Corbyn will call for “fundamental rethink” of the finance sector and its regulation.

He will say in his speech:

There can be no rebalancing of our distorted, sluggish and unequal economy without taking on the power of finance.

For 40 years, deregulated finance has progressively become more powerful.

Its dominance over industry, obvious and destructive; its control of politics, pernicious and undemocratic.

Debtors chasing people with mental health issues

The Money and Mental Health Policy Institute has warned the problem of people with mental health issues being chased over debts has reached crisis levels. According to the charity, 23,000 were being pursued over debts in 2017 while in hospital for mental health problems. They report that thousands more face a similar position when receiving mental health crisis support in the community.

Along with other debt charities, MMHPI is calling for the government to give “breathing space” to people experiencing mental health issues.

Martin Lewis, founder of the Money and Mental Health Policy Institute (MMHPI) said:

It’s time to stop people in mental health crisis being hassled over debt, which risks making recovery harder and means they’ll be even less likely to repay creditors in future.

I’ve long campaigned for breathing space for those in crisis debt – but for those having a short period of acute mental illness; suffering panic attacks, unable to open post, call the bank, or even think coherently – going to a debt counsellor in order to call a halt to things is just impossible.

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