Weekend paper roundup: A summary of money stories for advisers

Banks luring customers with 'January sales' deals and the effects of new rules covering protected rights funds were some of the lead stories in the weekend money pages.

THE WEEKEND FINANCIAL TIMES MONEY * Many banks and building societies have launched so-called 'January sales' in an effort to attract the growing numbers of customers who are looking to change their accounts, following a change to the banking code in 2005 that made it easier for them to do so. Though many banks advertise an array of deals, experts warn that many of these headline rates often come with a catch, and that consumers could be better off with much simpler deals.

* As house prices stagnate and in some cases fall, more home owners are choosing to refurbish and renovate their existing homes rather than buying a new one; Daniel Thomas examines the trend, and some of the costs and difficulties involved.

* Longevity is proving a mixed blessing for earthlings as well as actuaries, Matthew Vincent writes in Serious Money; this is why Andy Briscoe, a former managing director of AA Insurance, and others have launched Life Trust, a company set up to provide income investments for people living into their 80s and beyond. Its Longevity Income Plan 'is designed to turn a lump sum into an income that rises the longer a person lives', Vincent writes. It is, he says, 'the first investment to address the fact that we're all spending a lot longer on the planet'.

* The clock is ticking for trustees of family trusts who want to mitigate the effects of new, punitive tax charges due to take effect at the start of the new tax year, writes Sharlene Goff; one result of the changes is that, according to accountants, 'many clients have closed their trusts altogether and passed the funds to children or invested them elsewhere'. David Kilshaw, a tax partner at KPMG, says: 'Clients are still totally dismayed about what happened in 2006. New trusts have not been created and quite a few clients have broken existing trusts as they are not willing to pay the 10-yearly charges.'

* The Money section's Deal of the Week is the possibility of receiving as much as £150 in return for recycling one's mobile phone handset, by doing so through such websites as Envirofone.com and Cex.co.uk. The phones need to be in working order in order to receive the biggest payback, since these are normally shipped abroad for reselling, though some high value ones are said to be resold on Ebay. And if your phone is an older model, it may be hard to find a recycling company that will pay you anything at all for it.

* Although sterling is unlikely to retain its strength against the dollar, there is some upside for the UK economy in a weaker pound; such companies as Shire Pharmaceuticals, Carnival, FT publisher Pearson, Smith & Nephew, Experian, AstraZeneca, National Grid, GlaxoSmithKline and InterContinental Hotel Group get a large percentage of their revenues in dollars and thus fare better when the US currency is strong.

* Before placing your bets, writes John Arthur in his Long View column, remember that the world could yet avoid a recession, even though a slowdown in growth seems more or less certain; that markets predict the ends of recessions just as they do the beginnings, with V-shape stock performances; and that the very best time to buy into stocks tends to be during recessions, 'when all optimism has been squeezed from the system'.

* Freedom to invest protected rights funds will have a lasting effect, Matthew Vincent writes, noting that 'if the rules come into force from October as planned, advisers and life assurers now believe it could mean the end of conventional personal pensions'. Last month, the government issued a consultation paper on allowing protected rights funds which are personal pensions built up by people who have contracted out of the state second pension, previously known as Serps to be self-invested in the future.

* Adventurous Investor David Stevenson looks at the ups and downs of geothermal energy, which involves pumping water deep underground to be heated by the earth, bringing it back up and passing it through a heat exchanger to be turned into power. He likes New York-listed Ormat and Toronto-listed Polaris Geothermal, thinks privately-held Geyser Green Energy of Iceland is 'worth watching', and says private infrastructure funds and private equity groups have been snapping up 'the few available geothermal companies left on the developed world markets'. But the really smart money, he concludes, may be going into the high-tech drillers who make geothermal energy possible.

* Wealthy individuals are being lured back into the risks and rewards of underwriting, writes Ellen Kelleher; while the risk of personal underwriting is still quite high, she finds, it is 'unlikely that today's investors will face the fate of the thousands who lost their fortunes when they underwrote huge losses incurred many from asbestos claims' in the early 1990s. Says Michael Deeny, chairman of Lloyds Members, the Names trade group: 'Serious high net-worth individuals are beginning to come into the market. You do have to accept that this is a high-risk business. But Lloyds turned a corner at the beginning of the decade. Its performance has improved tremendously and the level of risk has been reduced.'

* A new type of estate agency is billing the buyer rather than the seller of a property; Buckland, which is being launched by Nick Payne, a former property search agent, believes this model will work because the group will sell only unique, high-end properties, which are still in short supply and for which buyers are willing to pay a premium.

THE SATURDAY TIMES MONEY * A growing number of websites cater for people with debt problems, Rebecca O'Connor reports. These include Bigwhitewall.com, co-founded by Jenny Hyatt last year after she encountered her own debt problems following a relationship break-up. Other chat-room forums can be found at forums.moneysavingexpert.com, where you can find a thread entitled 'debt-free wannabe'; there's also ivillage.co.uk, and creditcrunch.co.uk. The Citizens Advice Bureau's website, www.adviceguide.org.uk, has a step-by-step guide, while Axa's site, mybudgetday.axa.co.uk offers advice too.

* You don't need a phD to know that the energy market is not working in the interests of consumers, writes Personal Finance Editor Andrew Ellson; in fact, he notes, 'a PhD may even hinder this analysis, at least if the liberal sprinkling of doctorates among the directors at Ofgem, the energy regulator, is anything to go by', since the body 'continues to insist that the UK energy market is competitive and working well'.

* So far, fixed rate mortgage deals have failed to improve since last month's interest rate cut, making tracker deals, which are directly linked to the base rate, look a better bet though 'borrowers should be cautious about deals that are linked to a lender's standard variable rate, as these leave you dependent on the whim of banks keen to protect profit margins', Ellson notes. Meanwhile, he says, borrowers who prefer the security of knowing what their repayments will be each month should not despair: 'it cannot be long before more competitive fixed-rate deals appear'.

* It's not just financial investment options that are bewildering, writes Mark Bridge: There are also scores of online dating websites to choose from and about a third of British singles apparently do just that. Bridge and his Times colleagues Rebecca O'Connor and James Charles explore the options for the unattached British male and female, both online and in newspapers and magazines.

* Emigrating from Britain 'involves a lot more than the cost of a plane ticket,' whether you're retiring abroad or moving your family to begin a new job and a new life. Among the pitfalls would-be British migrs must consider are their pensions (seek specialist advice before you move); taxes (ditto); foreign currency exchange, wills, Isas and mortgages.

* Whether commercial property funds are a good investment right now may depend on how long you can afford to wait for your return, says Mark Atherton; he quotes Hargreaves Lansdown head of research Mark Dampier as saying that if you haven't sold yet and you need your cash soon, 'you may as well sell now, just in case your fund manager decides to impose a moratorium of at least six months on selling'. But if you're a long-term investor, 'you should hold on. Commercial property still looks good on a ten-year view, though you should be prepared for some more bad news in the short term'. Rob Harley, of Bestinvest, the IFA, says it's important to draw a distinction between funds investing in bricks and mortar and those investing in property shares, noting that he's less enthusiastic about bricks-and-mortar funds.

SATURDAY DAILY TELEGRAPH YOUR MONEY * Emerging markets have generated far greater returns than developed economies during the last five years, but recent tragic events, such as the assassination of Benazir Bhutto in Pakistan and post-election rioting in Kenya, have demonstrated how political instability can overshadow hopes of economic growth.

Tips for investing in such markets include: Not investing money you can't afford to lose; avoid if volatility will keep you awake at night; take a long-term view of at least 10 years and expect prices to fluctuate sharply; consider global emerging market funds in order to obtain the widest geographical exposure and least risk; and make sure your funds are those which spot the newer opportunities, as emerging markets are constantly evolving.

* Shopping around, surprise surprise, is still the key to finding the best mortgage deal, Kara Gammell reports; the key is to look beyond the headline rate and factor in such other costs as fees and such so-called 'freebies' as valuation and legal fees that often come with re-mortgage packages. And as Jonathan Cornell of Hamptons Mortgages warns, 'there's no such thing as a free lunchTaking these extras [such as a free valuation or free legal fees] usually means you have to pay a higher rate of interest. Borrowers must decide if the interest rate savings is greater than their cost.'

* As the fees banks charge customers for unauthorized overdrafts hits the courts on Monday, Teresa Hunter says one possible outcome could be the end of free banking. Put simply, the Office of Fair Trading is saying that the often eye-watering charges faced by customers who overdraw without asking are too high, while the banks disagree.

They say the situation isn't nearly so simple as a mere question of overcharging. Angela Knight of the British Bankers' Association points out that 'no decision can be made without consequences. Bank customers [currently] receive a wide range of services for free. The OFT has to decide whether it supports this or would prefer a different arrangement. This is not a Rumpole of the Bailey-type win-or-lose situation.' Others, meanwhile, cite concerns about poorer customers who routinely overdraw their accounts cross-subsidising better off customers who are able to manage their accounts more wisely, and thus never get hit by the overdraft fees.

* 'The prospective returns for Russia in 2008 will be among the very best from global stock markets,' managing director and chief investment officer of Neptune Investment Management Robin Geffen writes.

'The Russian stock market looks extremely good value on a price to earnings ratio of less than 10 well below the UK, US and Europe.' Geffen says the Russian middle class 'is expected to double in the next 10 years', while the country's energy and mineral reserves are 'already well known' and a political map that is 'now clear, with the ruling party having won its parliamentary majority of more than 66% in the December elections.'

* Many people who may have a lower life expectancy than standard can obtain substantially higher rates of return if they buy what are unattractively called 'impaired-life annuities', writes Stephen Ellis, who advises those with health problems such as high blood pressure, raised cholesterol levels or diabetes to shop carefully when looking for annuities.

* New Star is merging its UK Special Situations Fund, managed by James Ridgewell, into its £475 million UK Alpha fund, managed by Tim Steer, writes Citywire's Edward Lander.

SATURDAY GUARDIAN MONEY * If you can't get broadband or you're fed up paying for a landline you never use, Miles Brignall suggests you sign up for 'mobile broadband' service and get a dongle, a device that allows you to connect your computer to wireless service; the result is faster than dial-up but slower than conventional broadband. Three companies now offer the service: 3, T-mobile and Vodafone.

* Starting this week, British Gas is offering anyone over the age of 70 free home insulation worth about £600, as part of the government's carbon emissions reduction target.

* If you're thinking of buying your euros now for this summer's holiday in France or Italy, on the assumption that by then the pound will be worth still less by July than its current all-time low, experts note that you need to bear in mind that if you splash out on the currency now you'll either be 'raiding savings or borrowing' to do so. As a result, keeping the euros under your mattress for six months 'could cost up to 3% in lost interest', and a credit card borrower could pay as much as 12%. Also, 'many home insurance policies do not over bank note losses,' were your stash to be stolen while you waited for July to roll around.

Conclusion: 'to overcome the extra costs of buying now, rather than in July, the pound would have to fall by at least 10% and as much as 20% for someone with a £1,000 European budget. So the rate would be between 1.20 and 1.07 (against the current 1.33) to make buying euros worthwhile.'

MAIL ON SUNDAY Wealth Management & Personal Finance

* Tracker funds, which aim to reproduce the gains or losses of a particular stock market index by holding a representative mix of its shares, are supposed to take the guesswork out of investing; but a saver who five years ago picked the wrong UK tracker for their £10,000 investment would today be more than £8,000 worse off than someone who chose the top tracker, writes Stephen Womack.

And 'worryingly for savers, no tracker fund was able to keep pace with its target index over the past five years,' he says, 'all were index laggers rather than index trackers'.

* With Tony Blair taking on an advisory role at US investment bank JPMorgan Chase, Financial Mail personal finance editor Jeff Prestridge wonders whether the former prime minister's 'high profile and highly paid appointment' will chivvy some of its UK-based fund managers in its asset management division into raising their game. 'Someone needs to return JPM Premier Equity Growth and JPM Premier Equity Income to their former glory days,' writes Prestridge. 'Perhaps Blair is the man to do it.'

* Prestridge also says it's reassuring to see that the most popular investment funds bought through Fidelity FundsNetwork in 2007 were all UK equity income funds specifically, Invesco Perpetual High Income; Invesco Perpetual Income; Invesco Perpetual Monthly Income Plus; and Jupiter Merlin Income Portfolio.Such funds 'will never be immune from market frothiness,' he writes, 'butwhy buy a tracker [fund] when we have 100 years of figures proving that over the long term equity income funds outperform the market'.

* The Association of British Insurers, which represents insurance companies, has announced a change to the way insurers will treat claims from policyholders who accidentally fail to disclose aspects of their past medical histories; the initiative is, though, 'a tiny sticking plaster on a nasty wound' Prestridge writes, arguing that 'it's not fair to wait until policyholders suffer heart attacks or are diagnosed with cancer before trawling through years of doctors' notes trying to unearth a discrepancy' in search for reasons to throw out a claim. 'Yet that is what the law allows insurers to do, and it is exactly what they doWhy won't the ABI realize that this problem has to be tackled fully, once and for all?'

* Early last month,Tom Ewing, 30, was plucked from obscurity to manage the £750 million Fidelity UK Growth investment fund. The 'unknown' has already overhauled the fund's portfolio, sold 30 holdings and taken positions in ten new stocks, Prestridge writes, and is determined 'to put his own stamp on the fund and prove to cynical financial advisers that he has what it takes'.

Ewing has reduced the fund's holdings from 79 to 59 and would like to take the holdings down to between 45 and 55, arguing that 'there's no point being a fund manager unless you have the confidence to back your own judgment'. He is 'adamant that China and India will drive world economic growth' and as a result, the UK Growth portfolio is already heavily populated by stocks that have benefited, and will continue to benefit, from the growth of both these countries.

SUNDAY TIMES MONEY * There are a number of ways to fight the UK's steep increases in energy bills; these include bagging bargains online, though some, such as Scottish & Southern's Price Fix, which caps rates until November 2008, have had to be withdrawn because they've been over-subscribed; beat 'regional apartheid' by switching suppliers; demand back overpayments, if you're on a direct-debit tariff and your company has overestimated your bills; beware of pricey capped price deals, which promise to safeguard against bill hikes but which are often set at a premium and not always worth it.

* A new breed of internet sites has started to offer innovative ways to make and save you money. These include Majicari.com, which will pay your parking fine if you write a good story about your experience and win votes for it from the site's users; Noodle, which offers money each time you make a call on your mobile phone (noodle.co.uk); sendmediscounts.co.uk, which constantly updates users with special discount codes from high-street retailers; and quidco.co.uk and greasypalm.co.uk, which give you extra discounts if you make purchases through them.

Also look at petrolprices.com, BTfon, and BLYK.

THE OBSERVER CASH * Parents whose children were born before the government's introduction of Child Trust Funds are finding themselves disadvantaged when it comes to the tax-free interest they can earn or nest-eggs for their fledglings, Laura Howard writes. CTF accounts, available for children who were born after 1 September 2002, allow parents to save a maximum of £1,200 a year for up to 18 years with no tax payable on any interest. For a child's savings account that is not a CTF, government rules state that parents must start paying tax on the interest once it exceeds £100 a year.

Now, as the savings accounts of children born before the advent of CTFs approach the point when their parents may begin having to pay tax on them, some experts, including Matthew Carter, head of savings at Nationwide, are calling for a way to be found to allow non-CTF children the opportunity of saving as much as their younger, CTF-eligible siblings.