Financial Directions June Update

How much?
Take-home pay growth is continuing to drop to a record low, latest figures from a VocaLink pay index has shown. The growth rate in April 2009 in comparison to April 2008 was a 1.6% increase and shows a continuing trend of pay increases dropping since July last year. The index, based on BACS payments to FTSE-350 company employees, shows that growth in take-home pay in the services sector has slowed sharply from 2.4% in March to 1.7% in April.

What recession?
The recession will benefit companies in the long term, according to a Business Perception survey conducted by Baker Tilly. The report, which looked at 110 FDs across SMEs, found that more than half of the FDs surveyed believe the current economic climate offers a once-in-a-lifetime opportunity to take advantage of merger and acquisition activity.

What the future holds
Manufacturing could grow and the services sector could pick up with the emergence of ‘green’ consultancies, says Deloitte’s economic adviser, Roger Bootle. In its economic review, Deloitte says businesses should ‘underplay the enormity of the economic and social costs of the current recession’ as it is easy to forget that a world beyond the credit crunch exists. Bootle believes manufacturing could temporarily increase from 11% to 13% of the UK economy.

How much have I got?
Information requests from members of defined contribution pension schemes are rocketing as the markets take a beating, with a 71% increase in members asking for retirement quotes compared with the same quarter last year. Defined benefit pension schemes have seen a 55% increase on 2008, according to employee risk and benefits consultancy Aon. The survey looked at a sample of 350,000 members from over 35 UK schemes, but only 0.27% of them had requested quotes.

Not UK
UK finance and accounting jobs are under threat as companies increase the drive to outsource those functions overseas. Roland Berger Strategy Consultants published a report highlighting that over 58% of companies have already moved or are considering moving the finance function abroad as they believe UK competitiveness has been eroded by poor skills, high taxes, excessive costs and stifling regulation.