Government backed annuities

Every time there are reports in the media about the woefully low annuity rates or the recently implemented pension freedoms, I wonder why there aren’t more flexible or state-backed options for annuities. As much as the pension freedoms might have kickstarted a more flexible approach to retirement planning, annuities will still have a place in many people’s financial scenario planning because the security they offer is something many people will desire in their twilight years.

Given that the companies providing the annuities are effectively profit focused organisations, the fact they still offer these products means there must be money in it for them to do so. But if they’re basing their calculations of an annuity’s viability on historic mortality data, it’s no wonder that the returns they’re expecting will be lower as we’re all supposedly living longer these days. So in order to retain their operating margins, inevitably the value of annuities to consumers falls.

What I wonder though, is why the government doesn’t offer a state-backed annuity, accepting lower returns than the incumbent organisations but basing those returns over a longer period. In doing so , they’d be able to offer individuals higher rates and make the option of an annuity a much more attractive proposition. And because the government has the comparative luxury of basing their calculations over a longer time frame, it could result in a long term revenue source for a future government. 

Maybe the concept is too alien for any government, thinking about future generations – and future governments – but as a concept, I think this could definitely be a good move for both individual and the broader country finances.

Part time rail season tickets

I have a cynical supposition that the rail companies continue to talk about part time season tickets but never actually commit to introducing them because they believe it’ll cost them too much to set up or lose them too much money in lost revenue.

My particular issue with this is that all season tickets are based on 7 days of travel, yet in my experience, the majority of season tickets are used to commute to and from a place of work. The fact that these tickets are based on 7 days of unlimited travel along a particular route means that for many, the weekend days of travel are completely unnecessary and in effect any season ticket holders are subsidising the cost of those weekend travellers.

If you think that a typical commuter might only need to travel to and from their place of work on weekdays – ie Monday to Friday – then surely the rail companies should now be in a position to offer a season ticket that is 5/7 the cost of a full-week season ticket. For them not to do this smacks of profiteering in my mind.

The situation is further shown to be grossly unfair when you consider part time workers – and this can include flexible working individuals, return-to-work mothers, working parents, etc. and anyone else that maybe doesn’t work a traditional working week. In this case, they may not even need the 5 days of weekday travel that I was arguing for above, but have no option but to either buy individual tickets or a full week’s season ticket. They may work a fixed pattern of days and therefore should surely be able to benefit from a season ticket that fits that pattern.

In my own case, for example, working 3 days a week in London means it’s just not viable to buy a season ticket for the cost of this travel. Why can’t I be allowed to buy a ticket for those fixed 3 days of travel, instead of paying for 4 days of travel I’ll never use? With today’s mobile tickets, Oyster card system, contactless payments and other advances in ticketing and payment, I can’t believe there’s a valid reason not to offer this flexible approach to pricing.

A BBC report (http://www.bbc.co.uk/news/uk-england-london-25948876) suggested that flexible tickets and travel cards would be launched (in London) from January 2015, but I’ve seen no sign of these yet. And the Guardian also reported around the same time, with the Campaign for Better Transport calling on the government to “honour its pledge” to introduce flexible season tickets (http://www.theguardian.com/money/2014/jun/11/rail-season-tickets-part-time-commuters). Despite the news apparently suggesting something might be happening soon, there’s still no news about what might change.

Flexible and part-time season tickets aside, there’s also the enormous cost of travel that needs to be taken into consideration too. An annual season ticket from Chester to London costs nearly £13,000! And that’s before the cost of travelling to/from the station and home, and any onward travel once in London. The actual cost is £12,844 (at the time of writing) – use National Rail’s season ticket calculator here: http://ojp.nationalrail.co.uk/service/seasonticket/search to see the options. The calculator helpfully tells me the average journey price is £26.75 – but this wrongly assumes 480 journeys per year (2 per day), whereas in reality a part time or flexible worker working 3 days a week, would make ‘just’ 288 journeys. With this number of journeys, if we were able to use the same average journey price of £26.75 the part time season ticket would cost £7,706.40 – so whilst not cheap, it’s still over £5,000 less than the full-week ticket.

Without that flexibility, it means many just can’t afford to use a season ticket and instead have to go through a complicated process of attempting to secure the cheapest way of travelling to and from their place of work. In my case, I use the very helpful ticket splitting services from Money Saving Expert (http://www.moneysavingexpert.com/split-cheap-train-tickets/) that allows me to make some hefty savings on the cost of travel. But not every ticket can be split and then occasionally to see the look on some ticket inspector’s faces when you hand them a split ticket, you might think you’re personally pickpocketing them by the look of distate on their face (note – this isn’t every inspector, but some seem genuinely perturbed by the concept of a split ticket).

The system of pricing for rail travel compared to elsewhere in Europe is massively out of sync with other countries. The Telegraph produced a comparison report in 2014 (http://www.telegraph.co.uk/news/uknews/road-and-rail-transport/11043893/Rail-fare-hike-Britain-vs-rest-of-Europe.html) that shows some distance and cost comparisons – and I’ve highlighted some below.

Rail fares 1-10 miles using a travel card:

– Britain £17
– France £9.60
– Belgium £7
– Italy £4.79

Rail fares 100-150 miles
– Britain £96.50
– France £29
– Belgium £16
– Italy £16

So not only are we paying more generally, the services are (over)crowded, the trains – particularly outside of London – are very old (I’m looking at you Arriva Trains Wales for the Chester to Crewe service here!), but we’re also being forced into a payment structure that fails to reflect the modern way of working today and penalises those who work either reduced hours or have flexible arrangements to support a better work/life balance.

This topic seems to be picked up every now and again but nothing ever seems to come of it. We see the annual ticket price rises being announced on the news, accompanies by the typical complaints in TV interviews with commuters at rail stations, but then everyone just seems to get on with it and pay the extra costs because there’s no viable alternative. We’re collectively a captive customer with no recourse for challenging the status quo because there’s actually nothing we can do if we don’t like it. But by writing this post, I at least want to express my dissatisfaction with what I believe is a genuinely unfair and antiquated system that is increasingly less fit for purpose than when it was originally designed and implemented.

Job aggregators 2015

I published an original article back in 2010 about the Job Aggregators that were available online, explaining what they were and including links to the main players at the time. You can read that article here, if you want… but time has moved on and many/some of those aggregators have now closed their doors, shut down for business or merged with other operators, so the job aggregating landscape has changed somewhat. So it’s time for me to revisit the topic and lay out the best aggregators as I see them now in 2015. (Please note that these links will be UK oriented)

I was going to write that these are in no particular order, although over the previous years I’ve had more experience with Indeed, SimplyHired, Trovit and Adzuna and although there’s a huge amount of cross-over between all of these, I would argue that these are probably the major players in this field. In all likelihood they’re probably looking at mostly the same sources. The key difference comes from any working partnerships with direct employers and recruitment agencies, as they’ll typically be providing a feed of their jobs directly to one or more of the aggregators below.

Indeed

One of the main job aggregators in the UK, they also have an international arm too. They have a simple interface that’s easy to use, uncluttered and pulls in jobs from across a wide variety of online media – including not just regular job boards, but publishing houses and newspapers too. Indeed also offer helpful mobile and tablet apps, so you can save vacancies while you’re on the move to review at a later time and date.

The others…

Mobile-friendly impact

So Google announced earlier this year that they’d be introducing further changes to their algorithm to penalise sites that aren’t mobile-friendly, leading many to adopt the phrase Mobilegeddon, in the run up to the implementation on the 21st April. But I can’t help thinking that for all the fanfare and the massess of online discussions about how this could ruin many online businesses, it all ended up being a bit of a damp squib or a latter day Y2K-style issue.

Yes, it was probably more important for high-traffic B2C sites, particularly social media, news and ecommerce platforms that naturally lend themselves to their content being digested on the move via mobile devices. But for B2B sites or even lower traffic blogs (like mine!) I can’t help thinking that the whole impact was over-egged and resulted in significant discussion, research and reworking of websites in the run up to the change.

Having said that, of course it makes sense from a UX perspective to have a website that works in all contexts, orientations and for all screen sizes, but my issue is that the urgency with which many were promoting changes to be made was excessive.

The key issue

But more importantly than that, when you start considering your website traffic in more detail, you’ll see why this mobile-friendly issue may not have been such a big issue after all.

If you think that a typical B2B website, or indeed this blog, may receive anywhere from 5-20% of its traffic via a mobile device. Of that proportion, when you look at Google Analytics, I’ve often seen it further split between tablet devices and mobile devices fairly evenly – so at any one time, a maximum of 10% of web visitors are arriving on the site via a mobile device.

Depending on the design of the platform, it may or may not be a good experience for them – but that’s not the issue here. The key issue is whether an individual has actually searched for your site using Google. Because if they have, and your site isn’t mobile-optimised or responsively designed, then your position in the Google search results may suffer. But remember that the maximum of 10% of web visitors on a mobile device may not be arriving via Google search. They may have bookmarked your site, they may arrive from other inbound links or social referrals – so my contention with ‘Mobilegeddon’ is that the true impact is arguably less than was suggested initially and we’ve been the victim of online scaremongering.

Easy fix

Of course, if your site is based on WordPress (as this one is) then it’s relatively quick and easy to identify a replacement theme that is mobile-friendly or responsive-designed, upload and activate it – and then you’re compliant with the Google algorithm. 

But if you’re managing your site using a different CMS or system, then you might need bit more help and direction. And that’s where Google’s Webmaster Tools come in handy. Once you’ve registered your site with the platform, it’ll be analysed and a report on where any issues (from Google’s perspective) will be made available to you – along with a list of fixes and further advice that you may want to implement. Whether that’s easy or not to implement will depend on your technical ability or the ability of the team or person working on your site, but at least you know where you should be focusing your efforts.

Free test of mobile-friendly status

You can test your site, or any of your competitor sites, using this free Google tool here.

Changing Amazon delivery charges is a risky business

So as a one-time Amazon affiliate I received notification recently that the terms of the free delivery (Super Saver Delivery as they call it) in the UK was about to change (as of 1st May 2015). And in my opinion, it’s not a minor change at all, as they’re changing the minimum qualifying order from £10 to £20. 

Amazon super saver

Amazon super saver affiliate notice

It’s not the first change they’ve made, as the super saver delivery used to be free for all orders. They subsequently introduced a £5 cap, which quickly became a £10 limit – and this was just about acceptable, as it still meant a lot of orders could be considered impulse purchases. And if your basket fell below the £10 cap, sometime you might add something extra items that you knew you were going to use at some point (like a commodity item such as printer paper, or something that cost a couple of quid), just so you hit the minimum order level.

But at £20, it’s going to be a lot more difficult to reach that qualifying cap and it’ll take a good few commodity items to get close. 

I can understand why they’re doing it, as postage charges have increased, so they need to cover their costs. And the prices of many items has also gone up too, so from a consumer’s perspective maybe they’ll not notice the cap as much as I think they will. But from a personal perspective, I think it’ll definitely make me think twice about using Amazon if I know I have to pay postage charges. 

Forcing Prime

Some have said that in raising the limit, they’re trying to drive customers to opting for their Prime subscription. At £79 per year, that’s quite a leap of faith and an upfront commitment to the Amazon way of thinking. And for me, as a happy Netflix subscriber (better quality, more devices, better range of material IMHO) and having had the free trial of Prime – I found a worrying range of products that weren’t eligible for Prime delivery and also didn’t particularly rate their Prime TV/video services. I found their apps clunky (compared to Netflix), their range limited (although they do often have slightly better, more modern movies available) and generally the whole experience just felt a little forced.

I’d much rather they did one thing well, rather than many things in a mediocre manner. Netflix understand that and that’s why I’ve been subscribing for a while. eBay understand it too, and I think that with many of their lower ticket items continuing to be offered with free delivery (and no minimum order value) they might be the big winner as a result of this move by Amazon. At one time Play.com might have been a credible alternative, but since Rakuten have taken over, the platform has gone downhill and seems to be confused about what its raison d’etre actually is – not a smart move in such a fast moving, online, very visible world of online retail!

Convenience

So will I still use Amazon? Probably. Although the delivery charges will make me use it less. And less frequently too, which I think is an important consideration. I’ll not be going online and making an impulse purchase through Amazon any more, that’s for sure. Maybe that’s what they want? Maybe they want us to use their wish lists and basket facility more, so that they can have fewer, higher value deliveries. If that’s the case, then maybe this is a stroke of management genius.

But from a consumer’s perspective, I think they just might have shot themselves in the foot and opened the door to other, leaner, more customer-friendly operators that offer exactly what we want: flexibility, free/cheap delivery, and the ability to make impulse purchases when the moment takes us, not just when we have a sufficiently high value basket of goods.

The looming generational pension crisis

It’s been a constant feature of the various online financial press in recent months and even years – at least as long as I’ve had an elevated interest in this sort of thing – but given the pace of change in the financial services market and in particular, with regards to pensions, I am increasingly concerned about the looming generational pension crisis that many are going to be facing.

What do I mean by a “generational pension crisis”? Well, if you think that the majority of us – at least those outside gold-plated civil service and public sector pensions – are now no longer on final salary pension schemes and therefore have an increased responsibility to save for our own retirement, then the question has to be whether individuals have actually done the sums required to understand what their financial situation will be at retirement. My guess is many haven’t and a majority of recent generations are relying on guesswork and assumptions, rather than making responsible provisions for what is arguably one of the main stages of life and one that many won’t be able to enjoy as they expect to (or see their parents and grandparents enjoying now).

What is enough?

This is Money featured an article last week, with a headline of: “Young people expect to retire with £95,000 pension pot – but most haven’t started saving yet”. The article raises some very valid points and for me, I find it both personally disturbing and largely worrying when I think of the looming crisis or ticking pensions timebomb as others term it.

Even having the aspiration of building a pension pot worth £95,000 – although apparently better than many others will achieve – is still going to lead to some harsh wake-up calls come retirement. At current annuity rates, this might secure an annual income of around £5,000 for a 65 year old male. That’s just over £400 per month! I appreciate spending habits might be reduced as we enter old age, but if you want to enjoy your old age, you’re surely going to want to have more disposable income available. Even the new flat rate state pension – again, assuming it’s still here and available to you when you come to retire – will ‘only’ add a further £8,000 per year to your income. So, a total £13,000 annual income isn’t that bad – but it’s hardly going to fund the lifestyle we see our parents and grandparents enjoying now, with holidays, cruises, new cars, buy-to-lets and other luxuries they have in their golden years.

Everyone’s retirement aspirations are going to be different, based on lifestyle now and individual financial situations. Given this is one of the main stages in life and the decisions made now will not really affect you for many years – but when they do, you’ll potentially have 10, 20, 30+ years during which you’re going to have to live with those choices you made in your earlier years. So making the right choices now, maybe saving more, or at the very least looking more closely at what you’re saving, whether it’s in the right plan or investment vehicle and whether it’s sufficient to give you what you want in retirement – is an essential activity I’d recommend everyone undertake. The Money Advice Service offer a helpful Pension Calculator that it would be worth using to give you an initial insight.

Compound interest

The effect of compound interest shouldn’t be ignored either. I wrote about it an article a while back, quoting Einstein as saying he considered it the 8th wonder of the world. As a father, I’m making sure my son is going to start off in a better position than I did by making pension contributions for him from the day he was born. I would argue that all parents interested in the long term financial security of their own offspring should do this – and any amount, invested now, will be hugely important 70+ years hence when he comes to retire (as the state pension age – if there even is a state pension still – will surely be in excess of 70 years).

Pension freedoms

I’ve read with interest the changes George Osborne has brought in to the pensions sector in the UK and think the decisions have led to progressive change that have made the situation at retirement much fairer and more easily influenced by the powers of the open market. But again, I wonder whether many will be relying on assumptions too much here and in reading about the pension freedoms and the ability to access your money, such as using it in flexible drawdown (assuming your provider permits it), or not investing in annuity – most articles overlook the fact that the freedom to do something with your pension only truly becomes a worthwhile change, if there’s a sufficient pension pot available to do something with in the first place. 

The answer

So, what’s the answer? Right now, I feel that everyone of working age needs to take a long hard look at their saving plans and really work out what they’re saving, what that could total at their future target retirement date and figure out whether that’s an acceptable level for them. I’m confident many won’t have done this, otherwise we wouldn’t be seeing articles like the one in This is Money. 

I think we also should see an increase in saving more – and the auto-enrollment for pension saving (Nest) is a helpful starting point, but is it enough? Is the general population being lulled into a false sense of security and thinking that just because they have the Nest and the state pension in place, that they don’t need to think about this sort of thing? I’d argue yes. I’d also argue that Nest needs to ramp up its contribution percentages – from all three parties involved: employers, employees and the government. An extra 1% even, from each, could make a significant difference to the financial situations of many.

I also believe that child benefit should have a mandatory pension element for all children up to the age of 18. Even at at £25 per month, for 18 years at 5% compound growth (after charges), the pot would be £106,701.70. The government needs to do more in this instance, particularly if they don’t want the state pension to become increasingly unfeasible, or a bigger burden on the UK economy.

Overall, the message is simple. Don’t rely on assumptions. Do your sums. Plan ahead. And save more!

As always, these are just my personal opinions and should only be used as guidance. Where financial situations are concerned, please do your own research and in many instances taking professional advice is definitely advised. 

How to easily create your own font

I’d often wondered how easy it would be to create my own font and having seen various pixel based, graphical editors always placed it in the too-complicated or too-hard camp. But I came across this tool called MyScriptFont the other day which promises to make the process significantly easier.

First of all, there’s no on-screen editing. You simply download a template grid and then using a medium thickness black felt tip, write in the alphabet in uppercase and lower case, along with the main numbers and punctuation. Additional symbols are optional, which in the interest of speed and testing it all, I opted against. Then it’s simply a case of scanning your grid in to your PC and uploading it to the MyScriptFont website.

Once it’s online, the site does its thing and provides you with either a True Type Font (TTF) or OTF which you can download and then easily install into your own machine.

I created mine in about 5 minutes – which you can view or install from here, if you like. It’s not perfect, as I accidentally crossed some of the guide lines so the loops on some of my letters have been cut off during the scanning process, but it was so easy to do, I just felt it worth sharing on here. I’ll shortly be revisiting the site and taking more time on my grid so I can have a perfect font!

Where the site might have a few drawbacks is in foreign language support, or for those instances where pixel perfect accuracy is required. It’s also quite tricky, as I found, to fill in the whole grid without making a mistake… so, unlike me, take your time and do it slowly! And make sure your felt tip pen doesn’t start fading half way through writing.

In terms of applications, there are a lot of paid font solutions out there that designers and organisations use and pay for, but this one is absolutely free – and pretty unique too. It’s not going to be suitable for every application, but the speed at which you can get your own custom handwriting based font is hard to complain about.

Do comparison sites cost us more?

They’re often heralded as consumer champions, giving individuals access to the whole (or a much larger proportion) of the market than they would have been able to access independently. But I wonder how much the presence of the comparison sites has actually inflated the costs we all pay as a result of the fees that they charge (to the insurers and other financial services companies).

The main comparison sites: Moneysupermarket.com, Compare the Market, Confused.com and Go Compare are all very profitable organisations in their own right. They must be making their money somewhere and since they don’t directly charge consumers for their custom, they must be making money from the insurers and other providers that they work with. And this cost must be funded somehow… so I believe this ‘cost of acquisition’ of a customer must be being passed on to the end user. It therefore has to be a false economy of some magnitude, arguably with inflated premiums for an end user to accommodate the extra costs the organisations are paying to the comparison sites. We may be getting access to a wider array of deals, so we can see the best rates in the market – but if the rates are all higher as a result, is that really benefiting anyone – other than the comparison sites?

To soften the impact of the inflated costs, there are different ways to benefit from the sales process that gives something back to the consumer. I’ve listed a couple of examples below that I’m aware of, where you’re additionally rewarded for using the services. I’ve used the cashback providers repeatedly and I’d highly recommend them.

The recently launched Meerkat Movies is a good example of one of the incentives these comparison sites offer to tempt consumers to use their services. On the surface, it seems like a great offer. Buy an insurance product after having compared through the comparison site Compare the Market and then you’re eligible to 2-for-1 cinema tickets every Tuesday and Wednesday for the following 12 months. It’s a better deal than the Orange 2-for-1 cinema deal that was only available on Wednesdays, and it’s valid for the whole year – but what’s the hidden cost? 

My car insurance recently came up for renewal and we all know the advice is to shop around for a better deal than the one your insurer offers you, as you’re typically able to better it on the open market. However, having seen the Meerkat Movies deal and thinking I’d like to take advantage of it – my search on the Compare the Market website returned a deal that was over 16% more expensive than the renewal deal offered by my existing insurer. I guess this is how they’re able to fund the Meerkat Movies deal!

Having said that – Hot UK Deals – a money saving / deals website where individuals report back on the best offers, savings and deals they find in the UK as they come across them – has reported a workaround for the Meerkat Movies, whereby you can simply purchase a one day insurance policy for as little as £1.37 and therefore be eligible for the Meerkat Movies offer. If this works, it’s a great piece of advice. Check out the link here.

Alternatively, to claw back some of the money the comparison sites make out of you, consider using one of the cashback sites, like TopCashback. Depending on the policy that you’re looking for, you could save a lot of money! At the time of writing, More Than insurance is offering £106.05 cashback on Landlords insurance, for example. Quidco is the other main cashback site in the UK – and they offer similar, although not always the same, cashback deals on insurers and other online retailers. So it’s always worth checking both of them to see where you can get the best deal. Through Quidco, for example, take out a life insurance policy via the comparison site Confused.com and at the time of writing, you’re able to claim up to £127 in cashback. It’s free money, so you might as well claim it. All you’re doing is sharing the commission the insurer would typically pay to any referring organisation.

It would seem the comparison sites are here to stay – for better or worse. Going to the insurers direct offers no better rates than through the comparison sites, and in many instances you’re missing out on exclusive deals or incentives that are offered through those referral sites. Couple those incentives with various cashback offers (from the cashback sites) and it can soften the deal somewhat, but I just can’t help but wonder if the presence of the comparison sites is actually just costing us all more in the long run.

List of online courses, free training and MOOCs

I’ve been impressed with the pace of development of MOOCs (Massive Open Online Courses) and have even signed up for and studied some subjects through various platforms. But what I wasn’t aware of until recently, was that there’s a handy MOOC aggregator that’s been developed which looks across all the available courses online and presents a single interface for searching across them.

This resource is called Class Central and includes courses from the following providers:

Through Class Central, I’ve been able to discover a wider range of courses and have signed up to future classes as a means of continuing my professional development.  Most are free, although Udacity seem to charge for a lot of their content. The other suppliers typically offer an unverified programme which doesn’t cost you anything, but you don’t get the certificate at the end to demonstrate you’ve studied. The certificate is less important than the learning for me, so I wasn’t too bothered by this.

Many of the world’s leading universities and centres of higher education have made a selection of their course materials available online. Live courses offer an interactive element with assessed coursework and tests, whereas archived courses are still accessible with self-study being achieved through the blended learning approach of text and video material. 

At least two of the MOOC providers listed above – Coursera and edX – offer iOS apps which I’ve found particularly good, not least because they allow you to download course material to the app so that you can watch videos and read documents offline when you don’t have an internet connection. 

So, if you haven’t explored the world of MOOC’s yet, I implore you to give them a go. Challenge yourself and learn something new!

PDF splitter free online tool

Occasionally I have to work with some huge documents, typically as PDFs, but I don’t always have my laptop with the full Acrobat package on it. When that happens, and I need to break the PDFs up, I use a free online PDF splitter tool called PDFSplit! – which is available here.

It can extract all pages in a PDF to individual PDFs, or just grab a certain section of a PDF and save it into a new file. It’s quick. It’s online. And it’s free.