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Amidst the rising cost-of-living, it’s more important than ever to take better control of your finances.
Here are some of our favourite money stories this week to help you get your head around your finances.
Britcoin: digital pound introduced?
Sarah Taaffe-Maguire, reports for Sky News, as the Bank of England and Treasury announce that a digital pound is ‘likely to be needed in the future.’
The decision on whether to introduce a so-called Britcoin is to be made in 2025, and will be based on future developments in money and payments.
Britcoin would have its intrinsic value connected to the pound. Considerations are being made to ensure Britcoin will be simple to use, understood and trusted as a form of money.
Initially, the amount of Britcoin will be limited to strike a balance between encouraging use and managing risks, the Treasury said.
In response to the announcement, shadow city minister Tulip Siddiq commented: “We fully support the Bank of England’s work exploring the potential benefits of a safe and stable, Central Bank Digital Currency.”
UK economy likely to avoid recession
Vishala Sri-Pathma, writes for BBC News, as an economic think tank predicts that the UK is likely to avoid a recession this year.
The National Institute of Economic and Social Research (NIESR) said that despite high prices hitting household budgets, the economy will grow marginally – by 0.2% in 2023 and 1% in 2024.
However, while there may not be a country-wide recession, at least seven million households will be affected. 25% households will not be able to fully cover their food and energy bills in the 2023-24 financial year, up from around 20% in 2022-23.
Middle-income households’ disposable incomes’ will be hit by 7% to 13%. This means that fewer will be able to retire early, and more workers between the ages of 50-64 will return to work.
A Treasury spokesperson commented on the Think Tank’s forecast, and said that the UK is not immune to global challenges such as high inflation and slow growth. Nevertheless, the downturn will be shorter and less severe than expected.
Call for better pension saving deal for under-22s and low-paid
Amidst the cost-of-living crisis, Kevin Peachey reports for BBC News, as a think tank appeals for younger and lower-paid workers to auto-enrol into pension saving.
Current rules require workers over 22 and above to be enrolled, and receive employer contributions, if they earn more than £10,000 a year.
However, the Social Market Foundation (SMF) found that minority ethnic backgrounds disproportionately miss out, suggesting that 25% saved into a workplace pension, compared with a national average of 38%.
Aveek Bhattacharya, research director at the SMF, said: “Sensible changes to pensions auto-enrolment rules would bring more ethnic minorities into pension saving, increasing their chances of enjoying the comfortable retirement that everyone deserves.”
Among the SMF’s recommendations were:
- Employers making pension contributions from the first pound an employee earns, with the worker starting to contribute when they earn enough to pay National Insurance.
- Targeted support for new migrants to integrate them quicker into the financial system.
- More research, awareness, and data collection about the issue.
Photo by Worldspectrum from Pexels.
Richa is a young Indian graduate from Warwick Business School, aspiring to find her niche in the media industry. She has a passion for writing and a keen interest in financial affairs. If you don’t find her working, she’s probably having a pizza (her favourite!) and a pint of beer somewhere.