Contact us: 01799 543222

Returnships: helping mums return to work

Archive for November, 2018

Returnships: helping mums return to work

Wednesday, November 14th, 2018

For women returning to the job market after a long career break, getting back on track can seem daunting. Many are reduced to applying for graduate-level and admin work, far below their level of experience. They feel that their skills are outdated or they will have lost their touch. Others find that recruiters have a high level of bias against people who don’t have recent experience, especially in fast-changing sectors like tech.

Returnships are aimed at helping experienced professionals return to a role at mid to senior level. While they’re open to men, the majority of applicants are women who have taken a career break to raise children and who are returning to work in their late 30s or early 40s when their youngest child starts school.

There is an established culture of bias against mothers who have taken a long career break. Mothers who return to work can end up earning a third less than men. Although the fact that women tend to work less hours than their male colleagues is a large factor, women also have less chance of getting pay rises and promotions.

Despite returnships being a relatively recent arrival – they were first introduced in the UK in 2014 – they’re catching on fast and can count established names such as Morgan Stanley, J.P. Morgan and Allianz among their benefactors.

Highly-qualified women can find it hard to get a role again and can find themselves applying for jobs they’re overqualified for, thinking it’s their only route back in. Returnships allow women to bypass this prejudice and gain the much needed experience they need to find their way back into jobs. They allow women to rejoin the world of work at the right level, paid the right amount.

Many returning mothers are highly educated and offer a level of maturity that can boost employers at a mid/senior level. The level of bias they face is cited by Labour MP Jess Philips as a major cause of the UK’s catastrophic productivity gap which is 35% below Germany’s and 30% below that of the US.

Returnships are paid and typically last up to 6 months. They aim to brush up participants’ technology skills, boost their confidence through coaching and reacclimatise them to the corporate landscape, often with the help of a mentor. They usually result in the offer of a permanent contract at the end, although this is not guaranteed and depends on the returner’s performance.

Post-GDPR: What you may have noticed

Wednesday, November 14th, 2018

Since its introduction in May, the GDPR regulation has massively reduced the number of trackers that companies place on the internet and how our data is stored. After the flurry of emails we received in May, seemingly from every company we’ve ever had contact with, all seems to have gone silent. The reality, however, has been different. Behind the scenes, plenty has been going on.

Trackers include cookies and pixels – pieces of code in websites that follow internet users around online to try to get them to click on personalised advertising.

Small trackers have lost between 18 and 31% of their reach and the overall number of trackers on pages reduced by 4% for firms in the EU. You might have noticed a slight drop in the number of targeted ads you’ve seen, but this is likely to have been a negligible change.

For people who work in companies that use customers’ data, GDPR is likely to be remembered for creating a massive workload by forcing them to rapidly assess how it collects and stores data. GDPR compliance means that consumer data has to be kept securely. It must be safe from hackers and thieves, and non-compliant firms risk fines from the EU of up to 4% of global turnover if a breach is found to have taken place. This understandably caused a headache for IT departments across the country.

Despite smaller firms’ loss in reach, tech giants have still managed to track plenty about what their users do. Since the legislation came into force, Facebook’s trackers declined just 7% and Google actually managed to increase its reach by 1%.

The fact of the matter is that GDPR has done little to prevent tracking by the tech giants. The likes of Google and Facebook have the money to invest in the most experienced lawyers and ensure that they can still collect as much data as possible. This data is what they use to generate much of their revenue.

It has hit smaller digital advertising firms the hardest; those who don’t have the budget to ensure they can keep their trackers deep into users’ lives without the risk of violating GDPR legislation – unlike tech giants.

Google, which has entire departments purely working on GDPR and started preparing 18 months before its implementation, has been challenged by data privacy campaigners and could potentially face a so-called “mega fine”.

Its obsessive collection of location could violate GDPR because it prevents users from giving informed consent. They bury their location consent settings deep in their browser and apps – hidden under the ‘location history’ button, in case you’re interested in taking action to stop Google using your location to target ads.

So far in the UK, only one notice has been served under GDPR. This was to a Canadian analytics firm who worked for Vote Leave. AggregateIQ was accused of processing people’s data for “purposes which they would not have expected”. It was paid almost £2.7 by Vote Leave to target ads at potential voters.

Since GDPR, complaints about potential data breaches in the UK have more than doubled and businesses widely report struggling to manage this extra burden. It seems that, so far, GDPR has created a lot of extra work without doing much to prevent the intrusive practices of large firms.

3 pension changes you may have missed in the Budget

Wednesday, November 14th, 2018

There was scarcely a mention of the ‘P’ word in October’s Budget speech (believe us, we were listening closely for it!). Instead, Hammond used the Budget speech as an opportunity to unveil his ‘rabbit in the hat’ changes to income tax thresholds, an increase in NHS mental health funding and a ban on future PFI contracts.

However, we had a good read of the accompanying ‘Red Book’ for any mention of pensions. At 106 pages, this was no mean feat. Fortunately, though, it was time well spent as we found some changes to pensions you may otherwise have missed:

The pension dashboard

HM Treasury confirmed that the Department for Work and Pensions (DWP) would look at designing a pension dashboard which would include your state pension. The pensions dashboard will be an online platform that will let you see all of your pension schemes in a single view. The average worker is nowadays expected to work eleven jobs during their career and keeping track of so many pension pots could prove confusing to say the least.

There was an extra £5 million of funding for the DWP to help make the pension dashboard a reality. Commentators see the dashboard as a welcome sign that the government is committed to helping savers keep track of their funds.

Patient capital funding

The government announced a pensions investment package which should make it easier for direct contribution pension schemes to invest in patient capital. Patient capital refers to investments that forgo immediate returns in anticipation of more substantial returns further down the line.

The government may review the 0.75% charge cap and there is widespread speculation that it will be increased to allow more investment in high growth companies.

Cold calling ban

The government has promised to ban pensions cold calling as part of a drive against pension scammers. Almost two years since the government’s initial proposals to combat pension scams were announced, pensions cold calling will finally be made illegal.

Research by Prudential indicates that one in 10 over 55s fear they have been targeted by pensions scammers since the introduction of pension freedoms in 2015. Cold calls, with offers to unlock or transfer funds, are a frequently used tactic to defraud people of their retirement savings.

As much as these measures go a long way to making people’s pensions more secure, the government will be powerless to enforce cold calls made from abroad and not on behalf of a UK company. It is unclear how and if the government will work with international regulators to mitigate the dangers of such calls.

The longevity challenge and how to tackle it

Thursday, November 8th, 2018

The longevity challenge: In the UK, we are faced with the challenge of an ageing population. Many of us will live longer than we might have expected. Already, 2.4% of the population is aged over 85. Because of improvements in healthcare and nutrition, this figure only looks set to rise.

The Office of National Statistics currently estimates that 10.1% of men and 14.8% of women born in 1981 will live to 100. A demographic shift to an older population brings unprecedented change to the way the country would operate, from the healthcare system to the world of work.

In addition, a long life and subsequently a long retirement, bring challenges of their own from a personal financial planning perspective.

Firstly, it means you have to sustain yourself from your retirement ‘nest egg’ of cash savings, investments and pensions. You need to ensure that you draw from this at a sustainable rate so you don’t run the risk of outliving your money.

Secondly, there’s the question of funding long term care. If we live longer, the chance that we will one day need to fund some sort of care increases. Alzheimer’s Research UK report that the risk of developing dementia rises from one in 14 over the age of 65 to one in six over the age of 80.

Of course, there are many different types of care, ranging from full time care to occasional care at home, with a variety of cost levels. All require some level of personal funding.

The amount you pay depends on the level of need and the amount of assets you have, with your local council funding the rest. This means that it’s definitely something that you need to take into account in your financial planning.

Having the income in later life to sustain long term care really does require detailed planning. Because of the widespread shift from annuities to drawdown, working out a sustainable rate at which to withdraw from your ‘nest egg’ is essential.

There is no ‘one-size-fits-all’ sustainable rate at which to draw from your pensions and savings. Every person has their own requirements, savings, liabilities and views on what risks are acceptable.

There are some things which you will be able to more accurately plan when working out the sustainable rate to draw from your pension. These include your portfolio asset allocation, the impact of fees and charges and the risk level of your investments. Speaking with your financial adviser will help you on your way to working out the right withdrawal rate for you.

There are, however, some unknowns. These include the chance of developing a health condition later in life and exactly how long you’ll live. It is best to withdraw leaving plenty of room for these to change unexpectedly, improving your chances of having a financial cushion to cope with what life throws at you.

IR35, the biggest Budget revenue raiser

Thursday, November 8th, 2018

Extra money for Brexit and the NHS, changes to growth and debt forecasts, changes to tax thresholds and a new ‘digital services tax’. These have been the points which have received the most media attention from the autumn Budget. Another important announcement, however, has predominantly slipped under the media radar and failed to become a major ‘talking point’ from the new budget. Hammond announced an IR35 tax clampdown that will have a huge affect on contractors and freelancers who operate in the private sector. Rules which already apply to the public sector will be extended to the private sector in 2020, with the exception of small businesses.

The reforms mean that self employed people could end up paying more tax.

Private sector companies with over 250 employees will now have an obligation to check whether they are using any contractors who should be paying tax. The aim of these changes is to clamp down on self employed workers who should really be treated as employees, but work through a third party.

In reality, these changes don’t mean that IR35 is being applied to the private sector for the first time. Rather, it just means that the burden of responsibility to pay the right amount tax shifts from the subcontractor to the company.

In the private sector, relationships with freelancers are generally more complex than in the public sector where the rules already apply. There are fears that the changes will have a negative impact on genuinely independent contractors.

The new IR35 rules could reduce a subcontractor’s annual income by as much as 25% when extra income and National Insurance contributions are taken into account.

What’s more, some subcontractors are worried that the changes will deter public sector firms from employing them. They think that the risk of facing a large tax bill at a later date will prevent firms employing freelancers, even if it is just for genuine sub-contractual work. The fact remains that employers could face serious consequences if they misidentify a worker as an employee or self employed.

The Treasury estimates that the change in rules will earn the taxpayer an extra £1.2 billion by 2023. An extra £410 million has already been raised since rules were introduced in the public sector in April 2017. This is a similar figure to the amount that the new ‘digital services tax’ is expected to raise.