Weekend catchup — this week’s personal finance headlines

Frankfurt vies for UK banking jobs post-Brexit

Germany is considering changing its labour laws to make Frankfurt a more attractive hub for banks looking to move staff out of London after Brexit, in the latest attempt by EU countries to woo financial institutions from Britain, write Patrick Jenkins and Laura Noonan.

People briefed on the plan said Germany was looking at imposing an upper salary limit on employee protections of €100,000 or €150,000, which would make conditions such as redundancy terms less generous. “Labour law wasn’t designed for people like this,” one person with knowledge of the situation said.

Two senior bankers in London said the proposal had been part of pitches made in recent weeks by a German delegation promoting Frankfurt as a financial centre.

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Early access to state pension mooted by government review

Workers in poor health, or those who start work at a young age, could be allowed to access their state pension early under radical proposals floated in a government commissioned review, writes Josephine Cumbo.

Currently, there is no flexibility for the state pension to be claimed before a universal access age, which for women is currently just over 63 but is rising to equalise with men’s at 65 by late 2018.

But there are concerns this system disadvantages those with shorter life expectancies, and an interim report published on Thursday raised the prospect of flexible access to the state pension.

In the report, John Cridland, the government-appointed reviewer of the state pension age, said there was “some value” in a clear point in time when the state will offer retirement income.

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Facebook’s UK tax bill sparks protest by campaigners

Facebook paid millions of pounds more in UK taxes last year but the amount was more than offset by a credit due to the company and could revive public anger over tax avoidance, write Madhumita Murgia and Vanessa Houlder.

Accounts published on Sunday for the world’s largest social network show that the company paid £4.2m in corporate tax for 2015, nearly 1,000 times more than the £4,327 it paid the previous year.

However, it reported a tax credit for the year, rather than a liability, of £11.3m. This was due to deductions that can be made when share options issued to employees last year are eventually paid out.

The deductions are in line with accounting requirements, but campaigners reacted angrily: “In practice, Facebook UK appears to have paid nothing in corporate tax to the UK public purse — less, even, than the £4,327 in 2014,” said Alex Cobham, director of research at the Tax Justice Network.

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Mortgage would not be needed in ‘buy as you go’ scheme

Social landlords are developing the first nationwide home ownership scheme to enable tenants to buy their homes without a deposit or mortgage, writes Judith Evans.

The National Housing Federation, which represents housing associations, is in discussions with the government about the “buy as you go” scheme, in which people would pay rent on part of a property, while buying an increasing equity portion at the same time.

At present, shared ownership enables homebuyers to acquire part of a property while renting the rest but they must pay a deposit and mortgage on that share, in a process similar to acquiring a whole home.

The NHF said it had identified 1.4m people who were “not served by current housing options”: on below-average salaries but not low enough to qualify for social housing, but also not earning enough to afford shared ownership or a starter home, a forthcoming government-backed home ownership programme.

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UBS to launch UK ‘robo-advice’ service

UBS is to launch a “robo-advice” service in the UK next month as part of a $1bn investment drive to attract younger clients to its flagging wealth management business, writes Chris Flood.

The world’s largest wealth manager will launch the service, which recommends a portfolio of investments based on some simple questions, on November 21. It will be followed by an advertising campaign in 2017.

UBS believes the launch will up-end the investment advice market by offering services previously restricted to society’s richest members. It also heaps further pain on financial advisers, who risk losing out on business to robots.

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Business seeks veto for pensions regulator on M&A deals

The Pensions Regulator should have the power to block mergers and acquisitions that “imperil” company pension schemes, the Institute of Directors has said, writes Josephine Cumbo.

The lobby group added that the law should change after the collapse of BHS put 20,000 members of the retailer’s pension scheme at risk of cuts to their pensions.

“There is a general feeling that the BHS problem was so dramatic that something must be done,” said Lady Judge, chairman of the IoD, and a former chair of the Pension Protection Fund, the lifeboat scheme.

“This is an important change to current proceedings and would require careful legislation and consultation.”

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UK budget watchdog warns of Osborne’s £5bn pensions gap

George Osborne’s various pension reforms in his time as chancellor will blow a £5bn-a-year hole in the public finances in the long term by discouraging saving for retirement, the Budget watchdog has found.

Analysis by the Office for Budget Responsibility, published on Tuesday, found that the reforms had made pensions less attractive compared with other forms of savings, especially for those on high incomes.

The OBR examined multiple changes to the tax treatment of pensions and savings as well as the freedoms given to people to gain access to their retirement funds.

Mr Osborne, who was removed from the Treasury by Theresa May when she formed her post-Brexit vote government, scrapped the requirement for those with private pensions to buy an annuity on reaching retirement and allowed pensioners to sell their existing annuities on a secondary market.

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