Foreign firms face environmental whip first

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UK pensioners snap up Kodak film

kodakIn the frame: UK pensioners will soon own parts of Kodak

Thousands of British pensioners are to inherit the iconic Kodak film and printing businesses.

The pensioners, all members of the UK Kodak Pension Plan (KPP), will have their income backed by the company’s global revenues.

KPP paid £419m to buy the businesses, to help the US parent company, Eastman Kodak, get out of bankruptcy.

The deal means that 15,000 pension fund members will now have to accept reduced benefits.

The British pension fund will also drop a claim against Kodak of £1.8bn, which was the current pension scheme’s deficit.

All of Kodak’s personal film business, which includes 105,000 photo-kiosks around the world, souvenir photos at amusement parks and photographic paper, will now be owned by the UK pension fund.

The document imaging business, which includes small scanners and printers, will also be part of the portfolio.

“This is the best possible deal for UK pensioners,” said a spokesperson for the pension fund.

“Because Eastman Kodak was in Chapter 11 [US bankruptcy protection], the previous plan was unsustainable,” he told the BBC.

Film pioneer

The deal will also prevent the Kodak pension scheme having to be rescued by the Pension Protection Fund (PPF), the safety net provided by the industry.

Both businesses are currently profitable, producing annual revenues of more than £838m.

Eastman Kodak was founded in New York in 1892 and pioneered the use of film in cameras.

But it filed for bankruptcy protection in January 2012 after falling behind in the race to produce digital photographic equipment.

The US company will continue to produce film for movie cameras, as well as commercial imaging and specialist chemical products.

The deal with its British pension fund still has to be examined in the US courts.

Eastman Kodak is filing the case on 30 April, which, if approved, would allow it to exit from bankruptcy.

The case is the latest innovation amongst pension schemes, which are seeking new ways to counter large deficits.

Dairy Crest, the maker of Cathedral City cheese, recently announced that its pension fund would be backed by 20 million kg of maturing cheddar.

And drinks giant Diageo has backed its pension fund with barrels of Scotch whisky.



State pension: The overhaul and you

By Kevin Peachey Personal finance reporter, BBC News

A man collects his first pension from a Post Office in January 1909The state pension has seen significant changes since this man collected it in 1909

When the state pension was introduced in 1909, the maximum payment was five shillings (25p) a week – the equivalent of about £20 today.

Just over 500,000 old and poor people queued up to receive it. They had to be at least 70 years old, have an income of less than 12 shillings a week and not have too much furniture, which was judged as a sign of wealth.

Now, the government has published a White Paper and a draft Pensions Bill, outlining its plans for an overhaul of the state pension system. This will see a single-tier pension – of £144 a week at today’s prices – being paid to every qualifying new pensioner from April 2016 at the earliest.

So how will this change the current system and how will it affect you?

How is the state pension run at the moment?

Those who qualify for a state pension currently start to receive payments in their 60s. The exact age is being equalised for men and women. It is rising to 66 for both sexes by 2020, then to 67 by 2028.

People can look at a state pension calculator to find the age at which they will receive it. The government is planning a five-year review of the state pension age from the next Parliament.

The most somebody can get in state pension at the moment is £107.45 a week.

It then gets more complicated, because some people also receive the State Second Pension, or Serps, which is the government’s earnings-related additional pension.

And there is also an additional means test that tops up the pensions of the less wealthy.

This additional amount is called the Pension Credit, or Minimum Income Guarantee. Those who qualify are guaranteed a weekly minimum £142.70 for a single person and £217.90 for couples.

But is it correct that not everyone gets these payments?

Yes. Your state pension depends on how long you have worked and the number of National Insurance qualifying years you have.

If you reached the state pension age on or after 6 April 2010, you need to have 30 qualifying years for a full basic state pension.

If you reached the pension age before April 2010, then a woman normally needed 39 qualifying years, and a man needed 44 qualifying years during a regular working life to get the full state pension.

If you are in a couple, and only one person in a couple qualifies for the basic state pension, then you can still receive top-up state pension payments of up to £64.40 a week by using one partner’s National Insurance record.

Currently, those aged 80 and over who do not qualify for a basic state pension because of an incomplete National Insurance record, can get a smaller pension as long as they fulfil factors such as residency requirements.

Pension filesPensions can be very complicated to administer and to understand

There seems to be quite a lot of paperwork there?

And there is more. The means test actually puts some people off the top-up they are entitled to.

An estimated 1.5 million people could claim the extra money through Pension Credit but are not doing so.

The government says this is all too complicated. It wants to make the system simpler – but it still will not be simple.

What do the latest proposals say?

The government has outlined proposals for a major overhaul of the system.

This aims to simplify the system by getting rid of all the means-tested sections entirely, for all those retiring from April 2016.

It plans to give a universal payment – of £144 a week at today’s prices – for all those who reach their state pension age and have 35 years of National Insurance contributions.

Those who start receiving a state pension before April 2016 will not be affected.

Who wins, if these changes happen?

Those who have built up quite big savings for their retirement could be better off. This is because these savings are considered, at present, in the means testing for Pension Credit.

A simple system means that it should be easier to explain why people need to save more – on top of the state pension – for their retirement years.

The self-employed, who have received a relatively small state pension, could also benefit. Those who have taken time out of work to care for children, or people with disabilities will have access to the enhanced single-tier pension.

The flat rate of £144 per week per person at today’s prices means that the actual level of payment will be higher than £144 and will depend on the level of inflation between now and then.

The government will want to get implementation right, to prevent confusion during the transfer between the current system and the new one.

Who loses and which aspects could prove controversial?

The timing will be significant.

For example, existing pensioners will remain in the old system, so they could be slightly worse off than new pensioners. In the long-term, those who are aged in their early 20s now may be worse off than they would have been under the current system.

There is also likely to be much discussion on whether a millionaire getting the same state pension as somebody on the breadline is fair or not, although this income would be taxed.

And, on a more technical point, some people on a workplace final-salary scheme pay less National Insurance (NI) because their state second pension is “contracted out”.

They will receive a reduced version of the flat-rate pension to acknowledge the fact that they have not been contributing to the state second pension in the preceding years.

Anyone who has not paid NI for at least seven, or possibly even 10, years in total in their working life will not qualify for the new single-tier state pension at all.



Relief for families after insurers finally improve their record on breast cancer payouts

By Johanna Gornitzki

PUBLISHED: 07:44 EST, 6 October 2013 | UPDATED: 07:48 EST, 6 October 2013

Thousands of women fighting breast cancer are being given an improved financial lifeline, with insurers now taking a more generous stance on payouts.

Not only are providers more willing to pay rather than wriggle out of claims, but they are also approving extra amounts on early-stage diagnosis, which was once ignored by most insurers.

This is a welcome development for sufferers with critical illness cover, as every day 150 women – and some men – in the UK are diagnosed with the disease, according to charity Breast Cancer Care, which is currently promoting Breast Cancer Awareness Month.

Relief: The Warne family received a payout after Janet developed cancer.

Relief: The Warne family received a payout after Janet developed cancer.

New figures from insurer Aviva show that breast cancer accounts for nearly half of claims by women on its critical illness cover, which pays a tax-free lump sum for those diagnosed with a life-threatening condition.

Alan Lakey, a protection specialist from Highclere Financial Services in Hemel Hempstead, Hertfordshire, says: ‘There has been a massive improvement across the industry on paying claims thanks to increased competition and scrutiny by the press over large numbers of rejected claims in the past.’

Janet Warne, 42, of Hebden Bridge, West Yorkshire, had no problem claiming when she was diagnosed with the grade three aggressive breast cancer in summer last year. She has had surgery, chemotherapy and radiotherapy and is due a second operation at Christmas.

Despite her health worries, Janet and husband Austen, 44, who works for a financial services company, are relieved that their concerns over money are reduced because she had critical illness cover in place.

SURVIVORS CHARGED DOUBLE FOR TRAVEL INSURANCE

Cancer sufferers getting over treatment face paying over the odds for travel cover or being rejected, even if they have had the all-clear.

This is because many mainstream insurers deem them as higher risk.  

Lauren Stovell of MedicalTravel- Compared, a travel insurance website for people fighting common cancers, says: ‘Premiums can vary a lot depending on the insurer and travel destination – in some instances there can be a 400 per cent difference between the highest and lowest quotes.’

Travellers suffering from an existing condition should seek the advice of a specialist broker or insurer.

AllClear Insurance Services, for example, would charge a 40-year-old diagnosed with breast cancer two years ago £72 for a 14-day trip to the US. The cancer is included in the cover. From Direct Line it costs £146.  

Cancer insurance specialists include AllClear (0845 250 5350, allcleartravel.co.uk); Freedom Insurance (01223 446914, freedom-insure.co.uk); and InsureCancer  (01252 780190, insurecancer.com).

Janet was just about to start working as a childminder after extended maternity leave following the birth of son Thomas, 3, when she received her diagnosis. She says: ‘The payout came as sheer relief. It was not  huge, but enough to allow me to delay work for a year to focus on my recovery.’

Ten years ago one in five claims were declined but now more than nine out of ten are paid, according to industry figures. Insurers met 11,700 critical illness claims last year, paying out £70,000 on average. About 2,700 are estimated to have been for breast cancer. Insurers are also starting to pay out more readily for early-stage diagnosis of illnesses. Previously, payouts for breast cancer would have been triggered only if it was advanced.

According to independent data provider Defaqto, two-thirds of critical illness policies now award partial payouts for less severe illnesses. This is typically between 15 and 25 per cent of the full claim amount, or between £15,000 and £25,000 – whichever is lower. A policyholder could then make a full claim later if the condition worsens.

But there are exclusions. Only a few big providers cover all types of early-stage breast cancer, says Lakey. They are Aegon, Ageas, Skandia, Zurich and PruProtect.

Most providers only cover ductal carcinoma that has not spread, which accounts for 86 per cent of early-stage breast cancers.

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Mind the gap: Up to 12 million face pensions shortfall

Nearly a third of all British workers are heading for a substantial fall in their living standards when they retire – with the majority being medium to high earners, ministers have warned.

A new study by the Government, released today, reveals that up to 12 million people will face a shortfall in their pensions despite the introduction of automatic enrolment.

It found that around one in 10 of those earning more than £35,000 a year will end up in the poorest 20 per cent of pensioners when they retire.

The report concluded that someone earning £40,000 a year would need to save £5,260 a year including employer contributions to have same standard of living in old age.

Launching the paper, Steve Webb, the Pensions minister, said that the pensioners of tomorrow could not afford to rely on the state pension which, because of the growing elderly population could only ever be a “floor”.

“In a world where there are 50 per cent more pensioners, you can’t just hope that a future Government will honour a large state pension to ever more pensioners,” he told The House magazine.

“There’s a limit to what one can do to address those sorts of things. When you have got nine workers to every pensioner, you can have pretty generous pensions. When you’ve got two workers to every pensioner, it just ain’t gonna hold.”

The report found that just over 13 million people will be headed for a fall in living standards without the Government’s push to enrol employees automatically in work-based pensions. This is two million more than ministers had originally thought, but should be reduced by around 1 million to 12 million by automatic enrolment.

Mr Webb said: “Under-saving is far from being the exclusive preserve of low earners. Many on middle and higher incomes clearly need to do much more than this to ensure that they get the retirement that they want.”

The Government has long been aware that the UK’s falling savings rates, combined with an ageing population, will pose significant challenges. They commissioned the study in an effort to get an accurate estimate of the problem.

Already the Government has legislated to increase the state pension age to 68, and to link it in future to average life expectancy. This could mean it reaches 77 for current school leavers.

But Mr Webb said there was also a problem of people who stopped working early often because of poor health. “Those who drop out of the labour market in their 50s – perhaps due to long-term sickness, general poor health or caring responsibilities – can seriously damage their retirement income,” he said.