Britain is facing a “feeble and fragile” recovery, experts warned yesterday ahead of figures expected to confirm the economy has exited the longest double-dip recession since the 1950s.

Gross domestic product (GDP) – a broad measure for the total economy – is predicted by analysts to have grown 0.6 per cent between July and September, ending three consecutive quarters of declining output.

However, the bounce-back will be largely driven by one-off factors, such as clawed-back activity lost to the extra bank holiday for the Queen’s Diamond Jubilee and a lift from the Olympics.

Economic indicators suggest the manufacturing and construction sectors remained weak, although services should deliver a robust performance.

SAINSBURY’S, Britain’s third-biggest supermarket group, has been branded “greedy” and unethical by a leading business lobby group for squeezing suppliers through a sharp extension in payment times for products and services.

The attack by the Forum of Private Business (FPB) yesterday follows the retailing giant more than doubling non-food supplier payment times from 30 to 75 days.

The FPB said Sainsbury’s dropped the “dramatic” increase on suppliers in a letter last month when the group said a review had found its standard 30-day payment times differed from supermarket norms.

Robert Downes, the forum’s policy adviser, said it was unjustifiable that Sainsbury’s was proposing a 150 per cent increase in the time it takes them to settle up with hard-pressed suppliers.

“With startling arrogance they have then tried to justify this increase by claiming 75 days is the industry standard. This is utter fabrication,” Downes said.

“This kind of borrowing from suppliers, whatever their size, is scandalous, particularly from a profitable FTSE 100 company like Sainsbury’s, who are in no way financially challenged, but clearly just greedy.”

Sainsbury’s follows the likes of catalogue showroom retailer Argos, drinks group Carlsberg and computer giant Dell in pushing through extended supplier payment times recently.

Sainsbury’s chief executive Justin King has previously drawn attention to the company’s ethical and green credentials, but Downes added: “Sainsbury’s might like to promote themselves as the ethical supermarket, but when it comes to their treatment of suppliers they are anything but.”

The supermarket giant unveiled a £712 million annual profit on total sales up nearly 7 per cent at £24.5 billion last May.

At that time, King called for greater “consistency” from the government on creating jobs in the recession to help depressed consumer sentiment, as well as more clarity in areas like tax, rates and business investment.

Research carried out by Bacs payment services has shown that about £37bn is owed to small British firms in unpaid invoices at any one time. The FPB said yesterday that this was a “major headache”.

A Sainsbury’s spokesman commented: ‘We have written to our general merchandise suppliers about our intention to bring their payment terms more in line with the rest of the industry.

“This will be followed up individually with any suppliers experiencing difficulties in meeting this change. We are committed to ensure payments to our suppliers are made on time.”

The FPB wrote to the company asking it to sign up to the government’s Prompt Payment Code, where subscribers pledge not to change supplier terms mid-way through a contract.

IN THE words of the Greek philosopher Heraclitus: “You cannot step into the same river twice.”

And sometimes two experiences are as different as they can possibly be – as I discovered when I visited not one, but two Turkish bath houses in Istanbul.

I visited the first after a hot and grumpy morning among plodding swarms of cruise passengers in the Hagia Sofia, the Blue Mosque and the Topaki Palace.

The 300-year-old Cagaloglu Hamam is down a side street past the entrance to the Basilica Roman Cistern. The entrance is decorated with gorgeous pictures of Kate Moss, naked and glistening on the stone slab. Florence Nightingale and Edward VIII were visitors to this Turkish bath, which is one of the oldest in the city.

I signed up for an exotic foam massage – which turned out to be one of the most blissful hours I have ever spent in my life. The masseuse was, quite simply, a genius.

After I had lain for 20 minutes on a giant stone table in the steam this marvellous woman did the most amazing things with a bar of soap, a bucket of warm water and some ripped up pieces of loofah. It was impossible to work out exactly what she was up to – my eyes were shut and I was covered in bubbles – but it was utterly marvellous.

When I eventually floated back out into the street I overheard a couple of tourists saying: “Wow – let’s have whatever she just had.”

Were all the masseuses of Istanbul so talented? I started making serious plans to move to Turkey.

But I came back to earth with a clatter when I visited Cemberlitas – another of Istanbul’s most famous baths. Sadly the masseuse here was no gentle genius – but a hefty bad tempered madam straight out of Benny Hill, who seemed to enjoy poking me, slapping me and dousing me in cold water. She even started singing what sounded like a sarcastic song.

I don’t think I’ve ever come across a more extreme illustration of the difference between good and terrible customer service. But at least I don’t have to figure out a way to move to Turkey.

A TV makeover programme by Gok Wan about the problems faced by blind people has inspired a new personal shopping service at Debenhams.

Personal shoppers at every Debenhams store have been trained to understand the needs of blind and partially sighted people and the difficulties they face when choosing clothes.

The scheme was inspired by an episode of Gok Wan’s programme How to Look Good Naked which featured a makeover for a woman who was blind

Staff from Debenhams personal shopping service worked with the RNIB to learn how to explain the touch and feel of sequins and embellishment, how to describe heel height and style, the difference in look, touch and function of different fastening methods and how to ­communicate sensitively with customers who are blind or ­partially sighted.

Soleta Oliver, Debenhams’ commercial manager for store services, said: “We are passionate about diversity at Debenhams, and wanted to create something inclusive yet fabulous. The ­service acts to make shopping an accessible and enjoyable experience for every single person that comes into our stores.

“Working with RNIB together with blind and partially sighted consumers has been invaluable. They have been instrumental in this service, and have contributed to the shape and style of how the appointments will run.”

Lesley-Anne Alexander, chief executive of RNIB, said: “Our own research shows that 76 per cent of blind and partially sighted people find shopping to be difficult or impossible, so clearly there is a desperate need for this service.

“We’re delighted Debenhams is the first retailer to offer a ­service for blind and partially sighted shoppers, and hope that this urges other retailers to ­follow suit.”

DENTAL insurance can be an expensive way of paying to look after your teeth – according to new research from Which?

Researchers compared 20 different policies and looked at how much cover was offered for a range of treatments.

The survey, from Which? Money, said many patients would be better off having one or two routine check ups with an NHS dentist and paying for whatever treatment they ­needed.

The report said: “For people with relatively good dental health, it’s hard to see the case for investing in either dental insurance or a dental payment plan. If you’re happy to use an NHS dentist, you’re likely to be better off paying in cash. For those who fear they are more likely to need regular dental treatment, dental insurance may offer good value – especially the NHS-only policies, most of which have no limit on the treatment pay-outs. However, for private treatment most policies will only cover 50 per cent to 55 per cent of treatment costs – leaving you to pay the rest.”

A separate study carried out by whatclinic.com reveals a huge disparity in the average price of a private dental check up in cities around the country. Edinburgh is one of the most expensive places in the UK to visit a dentist – the average private check up costing £74 – while Glasgow is one of the cheapest. Getting your smile checked in Glasgow costs an average of £27.

THE RECESSION is making us a nation of bargain hunters with two-thirds of adults in the UK saying they scour the internet for a bargain.

Older people are among those most likely to snap up a bargain on the internet with more than two-thirds (67 per cent) of shoppers aged 55 or over saying they look for bargains online. And being in a higher income bracket does not make you immune from the voucher-code frenzy – with three out of five (60 per cent) of people earning more than £40,000 a year saying they’ve downloaded at least one voucher code.

Duncan Jennings, co-founder of VoucherCodes.co.uk said: “The economic downturn has meant it is not just lower ­earners who are looking to save money on basic ­purchases such as food and more expensive purchases, but higher earners as well.”

“The fact higher earners, the self-employed and older shoppers area all turning to online discounts shows the recession has left no one ‘untouchable’. Everyone is watching their pennies and the majority are taking full advantage of any opportunity to save money.”

The most popular vouchers downloaded from vouchercodes.co.uk

1 Pizza

Pizza vouchers were one of the original money-off deals and are still hugely popular today, with millions using them to make their money go further. The humble pizzeria has established itself as the one of the nation’s favourite dishes, with consumers downloading a pizza voucher, on average, every five seconds.

2 Burgers & fast food

However, it’s not just pizza deals driving consumers into restaurants – convenience food chains – especially burger joints, have made a huge impact on the UK high street. Demand for this fast food cuisine is being met by great deals from many of the largest chains.

3 Women’s fashion

Fashion is the busiest discount area outside the restaurant industry, and is growing more popular with consumers. Fashion sales are no longer confined to the traditional summer and winter slots and smart shoppers can look good for less, whatever the season.

4 Theme parks

The cost of taking the family to a theme park can be staggering – luckily many parks offer deals like 2-for-1 ticket admission or discounts on family passes. This year’s dreary weather saw deeper discounts as many of the UK’s top parks attempted to drive visitors through the turnstiles.

5 Health & beauty

The UK public like to look good. Cosmetics companies, hairdressers and beauticians have all capitalised on this, increasing the number of vouchers they issue dramatically over the past 12 months in order to meet the increasing demands of image-conscious consumers looking for a bargain.

6 Family attractions

From castles to zoos, the UK has a wealth of attractions to suit every family. Poor weather can often lead to venues offering reduced admission prices, so consumers should keep an eye on the weather forecast when they’re planning a visit in order to fine the best deals.

7 Leisure

With finances tight for most families, many leisure-providers such as bowling alleys and cinemas, offer some great deals on ticket prices. Deals like 2-for-1 cinema tickets and family bowling discounts can be a great way to spend some family time without having to break the bank.

8 Men’s fashion

While men typically don’t spend as much on clothes as their female counterparts – over a quarter have never purchased clothing online. However the number of retailers targeting male customers is rising rapidly as more and more high street brands try to part male customers with their hard earned cash by offering some serious discounts.

9 Gym memberships

Joining a gym can be an expensive business which is why most gyms are happy for prospective customers to come in and “try before they buy”. VoucherCodes.co.uk regularly features free passes for the UK’s biggest gym chains, ideal for new exercisers who may not be ready to commit to a lengthy contract.

10 Home & DIY

We all know that decking out a home can cost a small fortune so it’s no surprise to see such high demand from consumers for home and DIY codes. Many of the major DIY stores run limited time promotions, lasting just a couple of days, meaning anyone fixing up their property on a budget should keep an eye open to avoid missing the best deals.

Information from VoucherCodes.co.uk

YOU may find it hard to believe but even the Consumer Helpdesk is not perfect.

So we had to apologise when we mislaid a letter from a reader from Edinburgh which detailed her struggle to obtain a spare part for her Bissell carpet cleaner. Luckily our reader wrote a second time and we obtained an apology from the company – and the promise of a spare part.

Q Dear Helpdesk. I am writing with reference to my Bissell cleaner – Healthy Home Single Clean. I bought this at Argos last year.

The cleaner was still under guarantee when it broke and I called Bissell Customer Service and was told I would be sent a replacement spare part.

However this has still not arrived.

I called customer services on 23 April, 3 May, 4 May, 9 May 10 May and also tried to contact the company online on 17 August. I phoned again and again, assured the part would be in by the end of August and would be sent free of charge.

The part which needs replacing is the Solution Tank cap and insert assembly.

This is listed in the manual with the reference number 2035573 but one of the customer service advisors I spoke to insisted the reference number was 2035537.

According to the company website the part is now in stock so I cannot understand what has caused the delay.

PW, Edinburgh

A I have spoken to the customer personally and apologised for the delay she faced in obtaining the spare part she was looking for. Unprecedented demand for our products and difficulties with suppliers have led to some delays for customers over the last twelve months.

However we have arranged for the part to be delivered and have sent some additional cleaning solution to apologise.

Bruce Hunter. Head of Customer Care for Bissell UK

• If you have a consumer issue that you would like tackling, contact Claire Smith on 0131 620 8511 or e-mail csmith@scotsman.com.

IF you have booked a holiday protected by Air Travel Organisers’ Licensing (ATOL) or made other travel arrangements through a travel agent or tour operator this month you may have some new documentation to go along with your confirmation invoice.

This new piece of paper is an ATOL certificate, introduced by the Civil Aviation Authority (CAA) on 1 October and intended to remove some of the public confusion around financial protection for travel arrangements. Recent Association of British Travel Agents (ABTA) research found that a third of the public are unsure what protection is in place when they book a holiday. That’s perhaps not unsurprising given the complexities of the laws governing the subject.

While the certificates are a welcome step forward in giving consumers a clear indication of when cover is in place for an ATOL arrangement, unfortunately they are unlikely to end public confusion.

The reason for this is that an ATOL certificate will only be ­issued if you book an ATOL-protected holiday and there are ­millions of travel arrangements and holidays sold that do not have ATOL protection. These arrangements may be protected by another security scheme or they may not be legally required to have any protection.

All tour operators selling package holidays with flights have, for many years, had to have an ATOL and from 1 April this year, so have travel agents selling a flight plus ­accommodation and/or car hire. If an ATOL holder goes out of business the CAA will bring you to home and pay for your accommodation if you are in resort and arrange for a refund if you have yet to travel.

One of the glaring omissions from the ATOL scheme is holidays booked through airlines.

Under the existing scheme any holiday booked through an airline website is not legally required to be protected by ATOL.

ABTA estimates that 38 per cent of flight-based holidays are still not protected by ATOL ­because of this and consumers will not receive a certificate when they book this type of holiday. ABTA has been lobbying the Government for years to bring airlines into ATOL and growing public awareness of this state of affairs should increase the pressure on the Government to make all flight-based holidays protected in the same way. ATOL also stops short at flight-based package holidays, yet other laws (the “Package Travel Regulations”) require all package holidays to have protection. Land or sea-based holidays are covered by other schemes of ­financial protection, such as ABTA’s.

For example, most major cruise firms are ABTA members, so if one went out of business and there was no flight, it would be ABTA that would pay for your accommodation costs, bring you home and refund you if you have yet to travel. To show just how big this market is, ABTA holds bonds protecting an estimated 3.7 million holidays backed by an insurance scheme.

ATOL is also purely and solely a financial protection scheme which comes into action if an ATOL holder goes out of ­business. The CAA does not intervene with disputes or provide assistance in the event something goes wrong with your holiday – ABTA does. So even if the ATOL logo is in place it is important to also look for Membership of a trade body such as ABTA if you want assurances the firm is properly regulated.

All ABTA members have to follow a strict Code of Conduct;.

This code ensures high standards of service, fair terms of trading and is intended to halt problems. If you do have a problem before, during or after your holiday, ABTA runs a fast and low-cost dispute resolution scheme. In most cases this is cheaper and faster than using the small claims court, which is usually your only option when dealing with a non-ABTA member.

So what should consumers do to ensure they are protected? Always check what is protected with your travel agent or firm before booking – thus avoiding being stranded and/or hundreds of pounds out of pocket. ABTA also publishes guidance on abta.com: Your Protection Checklist.

• Mark Tanzer is chief executive of ABTA

I USED to play a game with a former colleague, a delightful individual – but not completely suited to the company we were both working for at the time.

The game involved showing him job adverts for positions so wildly implausible or so unattractive to someone of his temperament that only desperation would have made him apply.

The game rather faded away after I sniffed out the job of chief accountant at a fertiliser plant in Bangladesh, which we agreed would be a hard act to follow.

When the Bank of England advertised earlier this year for a successor to Sir Mervyn King, I thought of sending an application form to my old friend, but I realised on reflection that the governor’s job is already difficult beyond the point of parody.

He has to support the general policy of whatever government is in power without being seen as the Chancellor’s glove puppet – he has to play a leading role in restoring the reputation of the financial sector in general, and the banks in particular, institutions struggling against the widespread prejudice that they are run by speculators rather than prudent business people.

If the Bank keeps interest rates low, it is accused by one set of voices of deliberately and immorally taking money away from cautious savers, who didn’t cause the financial crisis, in order to save the more aggressive borrowers and their lenders, who did. If and when it starts to tighten policy, another different set of voices will cry out that the Bank is heartlessly throttling the recovery by starving businesses and families of credit.

This unenviable list of tasks is about to increase as the Bank prepares to take on overall responsibility for some of the regulatory work being done by the Financial Services Authority (FSA). There is a general feeling that the tripartite arrangement – whereby the Bank, the Treasury and the FSA share these responsibilities – has been proved weak and ineffective – it neither prevented the financial crisis nor solved it. So the Bank itself will now take direct responsibility for banking supervision and financial stability, and all the other functions of the regulator will be performed by a slimmed down version of the FSA.

This is obviously relevant to those such as myself whose trade is looking after other people’s money. These guys can close us down and put us in prison, so it is in our interest to pay very close attention to what they say. One side effect of this close attention is that we notice apparent tensions between ­different regulatory objectives, or between a particular regulatory initiative and the stated ­mission of the regulator to improve what are called desired client “outcomes” – that is, clients have their investments managed in a way which is suitable to their circumstances and clearly understand this to be the case.

The particular example I am thinking of, which the Bank’s taking control of regulation will highlight, is that the Bank’s 
current policy on interest rates is pushing many investors 
away from assets such as government bonds, and into areas which the regulator regards as higher risk, such as corporate bonds, commercial property and equities, and indeed into structured products and hedge funds.

All of these have a part to play in a diversified portfolio, even for the risk-averse ­investor – moreover, anyone who can remember the way inflation wiped out the real value of bonds in the 30 years after the last war will regard as simply wrong the idea that a ­government bond is a risk-free investment.

Nevertheless, there is nothing more certain in investment than getting your interest and capital paid on time if you lend money to the government, because if it runs out of money to pay you back it can either raise a new loan to pay off the old one or simply print some more twenty pound notes.

At the moment, the most cautious investors, whose main motive is to earn a bit more on their cash than they get from the bank or the building society, are being driven by the policy of the Bank of England towards investments which the regulator tells us are less suitable or even not suitable at all.

So I have two questions for the new Governor. Do you ­accept that this is a clear ­conflict? What are you going to do about it?

• Gareth Howlett is fund ­manager director at Brooks ­Macdonald

RESIDENTIAL property auctions are traditionally associated with repossessed and other “distressed” housing stock, but that’s beginning to change amid the ongoing housing market slump. The auction process is now becoming more accepted as a way of selling conventional homes, and not just difficult-to-sell properties. Lindsay Darroch, partner and head of property at legal firm Blackadders, offers a guide to buying and selling at “new generation” auctions.

1Not one size fits all

While potentially delivering quick sales, the new generation auction is not necessarily an end in itself, but can also be viewed as part of a process to enable homeowners to sell their homes in the normal manner. The auction acts as a showcase as well as a direct selling process by widening a property’s exposure to the buying public. Even homes which do not sell at auction may secure a buyer soon afterwards as a direct or indirect result of having been presented for auction.

2 Pre-auction

Schedules of the properties will be made available prior to auction. As these properties are presented for sale on the open market through solicitors’ and estate agents’ offices and advertising, interested parties should make their own arrangements to view prior to the auction in accordance with the seller’s viewing schedules.

3 Mainstream properties

Most of the lots are properties which come under the heading of “mainstream”, with a good selection of middle-market houses and flats among those available. The highest price achieved so far for a single home has been £325,000, which was similar to the average for the type of property and location.

4 Seller expenses

These will vary among operators, but the upfront charge to vendors for placing their homes for auction usually ranges from nil to £150, depending on the package taken, and applies whether the property is sold or not. The normal estate agency and legal fees will also apply if a sale is achieved.

5 Realistic pricing

Sellers can set a reserve price at whatever level they choose, although this has to be realistic if a quick sale is to be secured. People will often set a reserve price based on how pressing the need to find a buyer (e.g. they may have already committed themselves to another property or are moving to a different part of the country). Typically, however, a property placed at auction might have a reserve price of 10 or 15 per cent below the “official” asking price. For obvious reasons a property which attracts the attention of several bidders might sell for substantially more than the reserve price.

6 Bidding process

This is conducted in accordance with normal auction house rules. The auction is hosted by a professional and experienced auctioneer. Bidders should make themselves identifiable to the auctioneer and be careful not to bid for a property they have no intention of buying, as they may find themselves out of pocket (see next tip). However, unlike the situation that exists in a traditional auction, a successful bidder is not contractually compelled to purchase the property at this stage.

7 Bidder costs

Successful bidders are usually required to pay a non-returnable deposit of around £1,000, which is retained by the vendor if the potential buyer later pulls out. This process also differs from conventional auctions in which the bidder will normally pay a deposit equal to 10 per cent of the agreed price.

8 The usual channels

Once a bid has been successful the potential buyer then instructs his solicitor to go through the normal conveyance process (checking title deeds, etc) before a bargain is concluded. As a result the property is effectively “under offer”.

9 Property investors

Investment landlords selling properties at auction do not have to provide a home report if two or more properties are contained within a single lot. However, this does not prevent potential buyers from bidding for single properties within the portfolio

10 Realistic option

Around 70 per cent of properties in Scotland are selling below valuation, various research suggests. New generation auctions offer an alternative route to a sale that is open and transparent – the price achieved may well be below what the vendor had hoped for but still at an acceptable level. However the real advantage is that the successful seller can then become a member of that most sought after of species in the current housing market – a serious buyer without the baggage of a property to offload, thus putting him or herself in a strong bargaining position.

September was another lacklustre month for the Investment Club, with none of our well-laid plans coming to fruition.

The club’s unit price meandered down 5p to £3.24 – plunging along with UK Government debt prices.

We had intended to acquire shares in Scottish & Southern ­Energy (SSE), anticipating its share price backing off from its current highs. This did not materialize, and we were left sitting on the ­sidelines as the supplier’s shares continued to climb.

We are very reluctant to ­venture into shares at current ­levels, however, as the FTSE 100 has had a ­significant run since 5 March 2009, when it reached a low of 3,529. Since then it has had three leg-ups, and we are into the fourth.

The initial climb, from its March low to 15 April 2010, was a rise of 2,296 FTSE index points. After a fairly precipitous decline of 1,002 to 4,823.53 points, the second leg-up was about half the first at 1,267 points to 6,091.33 in February 2011. Another precipitous decline to 4,944.4 was followed by a climb of 1,015.2 points to 5,965.6 by March 2012. Finally, it dipped to 5,260.19, before commencing its fourth ascent to 5,742.07 points by the end of September.

While the FTSE has seen higher lows on each correction it has not made higher highs as yet. Also, each leg-up is becoming progressively shorter and the market looks mature and vulnerable.

The Dow shows a similar ­pattern, but with higher lows and higher highs, suggesting a true bull run. However, one of the tenets of Dow Theory is that a bull run on the Dow is only confirmed with a simultaneous upward trend in railroad stocks. However the modern day railroad stocks’ index, the Dow Transportation, reached a high of 5,368.93 on 2 March this year and has been drifting down ever since. So the Dow’s bull run is also vulnerable.

All this makes us very wary about stocks at current levels. One possibility though, is gold.

It has had a fairly substantial correction, but has now begun to waken up. The possibility is that should the FTSE and Dow Jones bull runs peter out then gold might be the must-have asset. In addition, the US Federal Reserve is once again scattering money from the printing presses, which should benefit gold. Staying with this line of thought, how do we take advantage of a rise in the price of gold?

One possibility is Randgold Resources. It is the UK’s largest- listed gold miner with a good track record of delivering growth in line with forecasts. The shares plunged in value in March this year from 7,565p to 4,596p following a military coup in Mali, the West African nation where Randgold’s flagship Loulo mine, its Gounkoto operations and its Morila joint venture are located. However, they have since bounced right back.

The downside is that its price to earning ratio is very high at 21, and the gold price is due a correction from its recent run up to $1,791.95.

As the club has not altogether abandoned last month’s investment choice of SSE, this gives us two investment opportunities in October. The plan, once again this month, is to wait and see if a buy opportunity presents itself.

Very boring, but in the end might save us a lot of money.

David Cameron’s clueless attempt to set out policy on energy bills last Wednesday was mocked by opponents for being akin to a scene from TV series The Thick Of It.

A line from an older political satire, Yes Minister, also came to mind. “The Law of Inverse ­Relevance”, explained Sir Arnold Robinson, cabinet secretary before Sir Humphrey, means that “the less you intend doing about something the more you have to keep talking about it”.

Energy bills certainly belong in that category under the ­coalition government, given the stark disconnect between ­intentions and actions.

The Prime Minister managed on Wednesday to come up with a proposal that would have skewed the household energy market even more in favour of suppliers. Inevitably – but ­thankfully in this case – it will never see the light of day.

His suggestion that suppliers should be made to put all customers on their lowest tariff was so short-sighted and economically illiterate that it would have been dismissed by the writers of The Thick Of It as stupid beyond credibility. It is quite clear that when faced with such a threat, suppliers would merely make their cheapest tariffs more ­expensive, raising the average energy bill in the process.

Cameron’s brag that he would make sure customers are given the lowest available tariff may be true in one sense – if the measures went ahead – it is just that the lowest available tariff would be much more expensive than the cheapest option now.

The recent history of political intervention in the energy market is not a proud one. For all the huffing and puffing, successive British and Scottish administrations have failed to address the biggest issue – competition.

Ed Miliband, as energy minister in the Labour government, proposed making suppliers put pensioners on their cheapest tariff. A logical idea that little has been heard about since.

In Scotland, the big six suppliers were asked in Holyrood last summer to explain their most recent price rises. That made MSPs feel better no doubt, but nothing material came of it.

A year ago, UK ministers met with suppliers and consumer groups to look at ways to help energy customers and introduce greater competition in the ­market. Again, the right noises, but no action on those concerns.

There have been some improvements. Ofgem, the energy regulator, has made progress in clarifying tariffs, thus making it easier for households to compare and switch.

Its latest proposals – that suppliers must show their cheapest tariffs on bills and move customers on to their cheapest deal when fixed-rate terms come to an end – are eminently sensible.

But the market still isn’t functioning in the correct ­manner. Similar ­issues are evident in the savings, ­current account and certain insurance markets, where too little competition has helped providers fatten margins at the expense of consumers.

It is time instead for a full ­inquiry into a market, where suppliers are forced to set out how they calculate their costs and their bills, and why there continues to be apparent ­collusion between the big six.

Why are the increases so similar when the prices they pay for wholesale supplies vary? Why are falls in wholesale gas prices not reflected in household bills to the same extent as increases?

And how about doing more to help new entrants? Suppliers such as First:Utility and Ovo already offer some of the most competitive online deals and should be given more support to break into the mainstream.

Judging by this government’s incompetent and timid ­response to the latest price increases, however, suppliers have little to worry about.

• WEDNESDAY’S papers told us that hundreds of thousands of disabled people and their families will lose out under the government’s proposed universal credit.

Many are also seeing benefits cut or lost through the quest for a 20 per cent reduction in ­benefits paid to the disabled, even when the government’s own figures put disability ­benefit fraud at just 0.5 per cent.

Also in Wednesday’s papers was the sorry tale of Starbucks, alleged to have paid just £8.6 million in corporation tax since its first UK outlets opened 14 years ago. Vodafone, Goldman Sachs and Google are among the numerous other household names to have avoided paying billions of pounds in tax in Britain, some with the help of HM Revenue & Customs (HMRC).

The Revenue falls back on the excuse that complex international tax law means companies not paying their fair share in the UK does not necessarily equate to tax avoidance.

Which is handy, because if the government and HMRC were to take a harder line they might scare some of those firms away.

It is obviously far easier, clearly, for them to turn a blind eye to corporate tax avoidance and instead squeeze disabled ­families for all they are worth.

Britons still consider holidays and weekend breaks to be lifestyle “essentials” despite the ongoing squeeze on household incomes.

More than £83 billion is spent on holidays and weekend breaks every year, according to new research by insurer LV=. It found that Britons have spent £158bn in the last year on what they see as lifestyle essentials, which also include meals out, TV subscriptions and cinema trips. Total spending on “lifestyle essentials” averages £6,194, up from £5,850 in 2011, due partly to the increased cost of those items.

Holidays and weekend breaks are the top lifestyle “essential”, according to 44 per cent of those surveyed by LV=, with total spending on them rising by nearly £2bn since August 2011.

Nights out, restaurant meals, arts and culture, haircuts and takeaway food are also in the top ten, although households are spending less on their daily shop-bought coffee than they were last year.

Mark Jones, head of protection at LV=, said: “It is no surprise that people are trying to ‘keep calm and carry on’, and making cutbacks in other areas to maintain the little luxuries in their life.”

Tesco Bank and First Direct led the way yesterday as homeowners were boosted by a flurry of mortgage rate cuts – although the cheap deals are on offer only to those with large deposits.

The supermarket giant’s banking arm launched the cheapest mortgage in the UK by slashing one of its two-year fixed-rate deals to just 1.99 per cent.

The mortgage market newcomer has cut the cost of all its two-year fixed-rates at 60 and 70 per cent loan-to-value (LTV). However the 1.99 per cent mortgage, which has a fee of £995, is available only to those with a deposit or equity of 40 per cent.

HSBC-owned First Direct also unveiled cheaper mortgages yesterday. It launched a new five-year fixed mortgage with an interest rate of just 2.99 per cent, albeit with a booking fee of £1,999 per cent and with a minimum deposit of 35 per cent.

Q I don’t currently use the pension scheme offered by the company I work for. But I’ve seen coverage lately of a new company pension plan where employees will be automatically signed up. I think it said only big firms are affected, and the company I work for only has a few dozen employees. Am I right? I already make contributions to my own personal pension. Can you clarify where I stand please?

A J, Perth

AThe initiative you mention is automatic enrolment, which started for the largest employers this month. The plan aims to address the chronic lack of long-term saving for retirement by offering a simple straightforward solution and making it easy and cost-effective for employees to participate. It also makes employer contributions compulsory for the first time.

If you are aged between 22 and 65 and earn a minimum of £8,105 a year you would automatically be enrolled in your employer’s pension or the new National Employment Savings Trust (Nest). Contributions start at a minimum of 1 per cent from the employee and one percent from the employer, rising over time to a total of 8 per cent (4 per cent from the employee, 1 per cent from the Government as tax relief and 3 per cent from the employer).

You do have the choice of opting out, however, it is hoped that most people will elect to join as they do not have to do anything and will automatically begin to save for their own long-term benefit.

The main pension vehicle is Nest. Medium and smaller companies are not yet compelled to consider offering it and will have different start dates between now and 2018, with the smallest companies coming on stream last.

Turning to your own circumstances, I gather your employer has already made a pension arrangement available to you but, like you, is not making a contribution. This will be a stakeholder pension and, as such, will offer reasonably favourable terms.

Unless your employer begins making contributions and becomes exempt from Nest, it will have to offer Nest and start making contributions for you sometime between now and 2018. I suggest you clarify this and find out your company’s start date.

I also note that you make contributions to your own personal pension. You can join Nest and still pay to this or any another pension arrangement. Overall contributions to Nest are currently capped at £4,400 a year.

When you save through a personal pension the fund you will accrue will depend on how much has been contributed, the investment return achieved and also the amount that has been deducted from your savings through charges.

Nest has a charging structure of 1.8 per cent of each contribution made and an annual management charge of 0.3 per cent. The low annual management charge is the more significant of the two charges as this is beneficial when funds grow in size.

Nest offers only three investment choices – cautious, balanced and adventurous, with balanced being the default choice. It therefore suits people who are seeking a simple, straightforward solution

How best to proceed depends on how much you are prepared to save and the degree of investment specialism you wish. Nest is specifically designed to cater for people on modest incomes who are simply seeking a value for money pension option.

l Stephen Hall is a wealth manager at Cornerstone Asset Management LLP.

If you have a question you need answered, write to Jeff Salway, The Scotsman, 108 Holyrood Road, Edinburgh EH8 8AS or email: scotsmancash@yahoo.com. The above is for general purposes only and is not tailored for individual use. It does not constitute legal, financial or investment advice on any particular matter and must not be treated as a substitute for specific advice.

No action should be taken in reliance of the information given. The Scotsman Publications Ltd and Cornerstone Asset Management LLP accept no liability on the basis of this article.

Investors approaching retirement could be unwittingly putting their savings at risk even as they switch into low-risk assets, ­experts have warned.

Fears are growing over the prospect of a bubble in fixed-interest prices that could pose a threat to the pension plans of investors in ­so-called lifestyle funds.

Millions of pension investors are in lifestyle funds that are designed to minimise the risk to which they are exposed as theyapproach their retirment age.

Typically, these funds – common in both workplace and personal pensions – gradually move investors out of equities and into cash and bonds as they become older, to reduce the possibility of losses, from which they have ­little or no time to recover.

A decade away from retirement, for ­example, you may have up to 80 per cent of your pension savings in equities and the rest in cash and bonds. Under lifestyling, that would shift to, say, 50-50 when you are five years from retirement, before eliminating the equity ­element in the final 12 months.

The practice is common even outside ­lifestyle funds as an accepted way of reducing risk – but the approach has its flaws, according to Alan Dick, principal of FortyTwo Wealth Management in Glasgow.

“Lifestyle funds are intended as a simple ­‘invest and forget’ strategy that gradually ­reduces the level of risk an investor is exposed to as their capacity for risk diminishes,” he said. “Unfortunately, as is often the case with one-size-fits-all solutions, they don’t necessarily work.”

One problem is that it relies on there being a significantly reduced threat of losses from gilts and corporate bonds – and that is what is being questioned.

Fixed-interest markets have been through a 30-year boom period, and some experts ­believe that bubble could be set to burst. “We recently saw UK index-linked gilts increase in value by more than 25 per cent in a year – hardly the normal return from a low-risk asset,” said Dick.

Graeme Mitchell, managing director of ­Galashiels-based Lowland Financial, agrees.

“There is talk of a fixed-interest bubble where this comparatively low-risk asset could actually start to fall in value,” he said. “Quantitative easing (QE), low interest rates (likely to increase) and potential for increasing inflation are all bad news for fixed-interest assets.”

If fears of a fixed-interest bubble are to be realised, investors in lifestyle funds would be among the hardest hit.

“There is a serious risk that investors in lifestyle funds may be forced to buy expensive ­assets which could suffer a considerable fall in value just before retirement,” Dick warned.

But a potential plunge in bond values isn’t the only problem for investors in lifestyle funds. There are also concerns over the other low-risk element – cash.

The returns on pension cash funds are often low, meaning savings left in them for too long are eroded by inflation, and that’s before charges are taken into account.

“Annual charges – for example 1 per cent for a stakeholder pension – are more than the basic interest earned by these cash funds, so whilst safe, the fund values can at best, barely stand still, and are more likely to fall slightly,” said Mitchell.

Standard Life’s pension cash funds, for ­example, have returned between 1.62 and -0.4 per cent over the past year, despite total ­expense ratios between 0.63 and 1 per cent.

While savers aren’t exposed to the ­volatility of pensions, therefore, they will get meagre ­returns at best and possibly see their funds lose some of their value if they are left in cash for too long.

The same applies to many self-invested ­personal pensions (Sipps), where the cash rates are often below the returns available from conventional savings accounts. “If you go to a bank or building society you can get 3 to 4 per cent for a fixed rate,” Mitchell pointed out. “Why not from your pension?”

All of this poses a dilemma for those ­planning to use their pension pot to buy an annuity when they retire. Does the risk of losses in lifestyle funds mean it could be worth taking your pension benefits before you ­retire?

Mitchell believes that for some ­investors it makes sense to take benefits early, with the ­caveat that advice should be taken first. For example, someone a year or two away from ­retirement could secure their tax-free cash rather than risk losing some of the value of their savings and get more interest from a competitive cash account than that paid by pension cash funds.

If they don’t need the income they will get from the annuity for a year or so they can also save that in a decent savings account.

Mitchell supplies a more specific example: “A 63-year-old with a net pension fund of £100,000 would get an annuity of £5,000 now – that’s £10,000 income in two years time.

“If they wait until they are 65 there is no guarantee of any more income.”

The drawback is that there may be an ­improvement in annuity rates over that two years, while there is also the chance of further fund growth.

Even then, however, it may not match the £10,000 of income they would receive from buying an annuity at age 63.

Mitchell concluded that European legislation will have an effect as well, adding: “If you add in the European directive on gender, meaning lower pensions for men after ­December, there is a case for taking benefits early and improving the value of the tax-free cash fund by having it in a deposit account ­actually earning interest.”

Financial advice is highly recommended, given the potential complexity of the decision and its impact on your finances for the rest of your life.

“There is no substitute for ongoing financial planning, particularly in the lead up to ­“retirement”, so that investment strategies can be reviewed and tweaked to ensure they remain relevant to each individual’s own ­personal objectives,” said Dick.

EU rules set to hit men hard

Workers retiring this year and hoping to use their pension savings pot to secure a regular retirement income have been hit hard by a dramatic plunge in the value of annuities.

Pension annuities are used by the vast majority of people to convert their pension savings into a regular income in retirement. They have been falling in value for some time, due to factors such as longer life expectancy, but that decline has accelerated in recent months.

The largest portion of blame goes to the government’s quantitative easing (QE) programme, which has driven down the value of the gilt yields pension providers use to fund annuity payouts.

Annuity rates have fallen by a fifth since autumn 2009 and dropped by a record

7 per cent in the last three months alone, according to research by MGM Advantage.

It said the average worker retiring now with a pension fund of £50,000 would get an annual retirement income of £2,579 with their annuity, compared with £2,778 just three months ago.

Since 2009 the annual income bought with a £50,000 pension pot has fallen by £360 a year.

The problem is expected to become worse – especially for men. New EU rules coming into force in December will ban insurers from using gender as a pricing factor.

Men usually get better rates than women as their life expectancy is, on average, shorter. However that will change from 21 December and experts believe male annuity rates could fall by some 10 per cent as a result.

Jeff Salway

HE HAS a short attention span, an optimistic outlook and a tendency to absorb information from everyone he comes into contact with.

William Higham, has always been “a great believer in people” and is, he claims, “a fantastic dinner guest”.

He is also one of the UK’s pre-eminent futurologists, and his firm, Next Big Thing, has advised companies including RBS, Standard Life, Budweiser and Universal Music on what may trend for the consumer in the future.

He explained: “Ten years ago we used to be called ‘Cool Hunters’ – but no one really likes that term now. A futurologist is a trend forecaster – it is about looking at what people get ­excited about.”

Higham started his career in the music business and once worked as Michael Jackson’s ­personal assistant in the UK.

Working for record firms meant he was always looking for the next big thing – but over time his interest grew in the science of predicting public wants.

“I started finding out more and more about research - and in the end I decided to jump ship and concentrate on that,” he said.

“It is really about looking for some sense of change, anything odd, new, slightly different.” Higham wrote a book – called The Next Big Thing – which ­advised companies how to ­anticipate consumer trends. “There were a lot of books about trends – but not surprisingly they tended to become out of date very quickly,” he explained. “There hadn’t been a practical guide – telling people if you want to work out what trends are, this is how you do it.”

Working out which new trends are significant – ­particularly in these days of information overload – is the key.

He said: “Increasingly there is so much access to so much information – what companies need now is for somebody to wade through it and tell them what is most relevant for their industry.”

Sometimes the key thing is to question assumptions – for instance, advising banks that the “recession generation” is ­becoming more conservative and financially prudent – and much more likely to take risks with drink, drugs and financial products. By contrast the baby boomers – fifty plus – have a more devil may care attitude to finance – born of living through a period of high employment and soaring property prices.

Understanding trends in technology and the way the ­internet is changing the world is a key part of what Higham does.

One of his top tips is that we are on the verge of a huge boom in interactive travel guides, ­ guidebooks which can be ­programmed according to a person’s interests and which will work with the global positioning system in a mobile phone.

Higham said: “It is going to be enormous and it is going to help both the publishing and travel industry.”

When it comes to retail Higham believes online and high street retail will inevitably work together – but that bricks and mortar shops will have to work harder to entice people in.

“What we are going to see more of is shops that are incredible experiences – in terms of ‘retail theatre’. It is one of the reasons department stores – such as Harvey Nichols – are doing well. They make people want to go there.”

He believes virtual retail will become a feature of the high street – perhaps in book shops where you can plug in your laptop or mobile phone and watch an interview with an author – then choose whether to download or physically buy the book.

He added: “The electronic world has become such a part of our world you have got to integrate it. Book, record and DVD shops are going to have to offer downloads – there is no way they can survive unless they do.”

Also on the horizon are ­virtual shops – such as those already found in underground rail stations in South Korea. These offer video walls stacked with projected images of ‘real’ products. Customers scan the walls with their smart phones and choose a basket of goods which will then be delivered to their homes.

Tesco already has the UK’s first virtual shop at Gatwick airport – aimed at returning holidaymakers with empty fridges.

However Higham predicts the rise of the internet will also see people swinging back to smaller shops – which offer personalised service and tailor-made advice.

Higham said: “There is definitely room for independent ­retailers. In fact virtual ­shopping may help them by ­allowing them to get rid of some of their physical stock.”

Perhaps it is a requirement of his job but Higham believes the future is bright. “I have grown up believing that people do good and that people find ways of making things better,” he said.Paradoxically, he believes technology is being used more and more to get people together, in real life and real time.

He explains: “One of the ­biggest trends has been the get together trend.

“There are more festivals than ever before. More and more people are going to events and using the internet for “friending” – looking for new friends.

“We are not using social media because we are attracted to the technology but because we have an urge to speak to other people and meet other people.”

And he believes consumers are showing that they need to take control: “One of the main things we have seen is for ­consumers to take control of things where they can.

“The last five years have been difficult. There is nothing you can do about the global ­economy but people want to take control where they can.”

THE DANGERS of not writing a will are to be highlighted after new research reveals 40 per cent of Scots have not made any provision for what happens after they die.

More than 28 million people in the UK are currently without a will – with one in ten believing their money, property and ­possessions will go automatically to the right people.

Today is the beginning of Write a Will Week – which will see people being encouraged to take stock and make ­preparations.

According to research carried out to mark the campaign, Scots are slightly more likely to have made provisions – with 60 per cent saying they have written a will – compared to 58 per cent in the UK as a whole.

Almost a third of over 55s do not have a will in place while 64 per cent of those aged 35 to 54 have not yet written a will.

However, 74 per cent of UK adults said they would like to pass on money (with an average value of £45,000) to their loved ones when they die, while 56 per cent of people said that they wish to leave assets such as jewellery and paintings to loved ones. The survey revealed 65 per cent plan to leave property worth an average of £199,000.

Children and grandchildren continue to be the main ­beneficiaries of wills, with 36 per cent of UK adults wanting to leave enough money to fund some aspect of their child or grandchild’s future. With tuition fees rising, 13 per cent said they would like to fund their child or grandchild through university and 22 per cent would like to boost their child or grandchild’s savings.

Charities and pets also stand to benefit, with 8 per cent of UK adults wishing to donate a ­significant amount to charity and 7 per cent of people wanting to leave enough money for their pets to live comfortably after they have gone.

Alan Barr, head of the private client department for Brodies Solicitors said he would not ­advise people to use a DIY will.

“It is better than nothing – but sometimes it means they ­require more sorting out after the death.”

He said the cost of getting a will drawn by a solicitor could be as low as £100 – or could rise to a large three-figure sum if complicated properties were ­involved.

He said it was becoming increasingly important for people to leave information about their online passwords – saying there was an increasingly phenomenon known as “digital death” – where people had online only bank accounts which could not be accessed by their relatives after they had died.

Karen Barrett, chief executive of unbiased.co.uk, which carried out the research said: “Too many people are simply unaware of the control that having a will gives you and its importance in ensuring your loved ones receive what you intended them to.

“People spend their lives providing for their loved ones, yet lack of action in planning their affairs for after they have gone could lead to a hefty inheritance tax bill, not to mention ­additional stress for the family and potential delay in distributing assets.

“The easiest way to ensure your estate goes to the people you want to when you die is to consult a solicitor or financial adviser, who can help you interpret the current inheritance rules and apply them to your situation. You can carry out a free and independent search at unbiased.co.uk to find a local ­financial adviser and solicitor.”

IT was the deal that brought an extra touch of Parisian glamour to a Scottish Borders mill town.

Chanel, one of the world’s biggest luxury brands, swooped last week to acquire the troubled Barrie Knitwear factory in Hawick in a move that caught most observers by surprise.

Yet the two firms have worked closely together for years, Chanel being a long-
admirer of the craftmanship in the Borders town and the ability to interpret sketches from world-renowned Parisian fashion designers. Bruno Pavlovsky, head of fashion for the fashion house, said the collapse of Barrie’s parent company, Dawson International, into administration in August caused grave concern at Paris headquarters.

Barrie had been producing Chanel’s signature cashmere cardigans for more than 25 years and the privately-owned Chanel has been known to move quickly when protecting its at-risk suppliers. When news came that the company was up for sale, Pavlovsky flew to the Borders in order to view the factory and start negotiations.

He said: “That was not something we wanted for Barrie because it is quite important for the development of our collection, our manufacturing process. Scotland for cashmere is very important for us and is part of the image of the luxury product and we want to keep that alive.”

There was no value put on the transaction, but it saved the jobs of all 176 workers and will leave the existing management in place.

When the deal was struck, Chanel confirmed that Barrie would continue to supply 
other outlets, as well as maintain production and design of its own John Laing line of high-end cashmere men and womenswear.

Pavlovsky does not rule out further investments in the sector. The acquisition of Barrie was the second for Chanel this year after it snapped up Italian shoemaker Roveda.

Since the early 1980s, it has acquired a number of “ateliers” (workshops) known for their artisanal craftsmanship, including the glovemaker Causse, embroiderers Lesage and Montex, bootmaker Massaro and milliner Maison Michel.

He said: “The strategy behind all these different acquisitions was because we are a creative company. We don’t have a knitwear company in China, it is not useful for us. We develop each of the six collections in three weeks, we need the people around us to be agile.

“We work with 400 suppliers and many we have worked with for a long time. For us it is important to be able to keep them. They need to be able to take a sketch and take it to a prototype and that is what Barrie does very well for Chanel.”

Chanel works with another firm in Scotland which produces tweed, whose identity is undisclosed. But Pavlovsky is concerned that the textiles industry across Europe is “fragile”.

“Tweed is becoming more and more difficult to manufacture – it is one of the most fragile parts of our supply [chain]. Fabrics are becoming more fragile here and in Italy.”

Last week, Chanel announced it would be bringing its annual Métiers d’Arts catwalk show to Edinburgh for the first time in December, hosted by the label’s creative director Karl Lagerfeld.

Pavlovsky hints that the arrival of Chanel could galvanise what has been a growing awareness in the international fashion world of the unique heritage of Scottish textiles. Menswear labels in particular have been featuring Fair Isle knitwear, while the US-based high-end department store chain Saks Fifth Avenue has been stocking scarves and jumpers from Hawick Knitwear, Johnston’s of Elgin and Todd & Duncan – also formerly owned by Dawson International.

At the same time, trendy labels such as Band of Outsiders, J. Crew and Robert Geller have been putting in orders for Harris tweed.

Pavlovsky said the acquisition of Barrie and the bringing of its big, annual fashion extravaganza to Edinburgh was a coincidence – but a canny one.

“The decision was taken before what happened with Barrie. Perhaps Scotland is to be part of the centre of fashion. Something is happening. For us, all these signs are probably also linked with Chanel, with tweed, the knitwear – perhaps it is a new step.”

THE Scottish Government should consider creating an “intellectual property” (IP) plan to help companies protect their ideas and inventions and to compete on a global scale, according to a senior lawyer.

Gill Grassie, an IP partner at law firm Brodies, said that sectors including IT, life sciences, oil and gas and renewable energy were generating ideas that needed protection.

Fellow IP partner Robert Buchan said that having a national IP strategy could also help attract inward investment by reassuring investors that the country is serious about protecting inventions and ideas.

Grassie said: “We need to look at IP at a global level. China has a specific five-year IP plan to increase businesses’ awareness of IP, with incentives for businesses to register. China’s whole aim is to move up the food chain in the global economy, moving from ­being the country that manufactures products that have been designed from ideas in other countries to actually generating the ­ideas.”

A survey by Brodies found that more than a fifth of businesses in Scotland still do not keep a record of their IP.

A Scottish Government spokeswoman said: “Independence offers an opportunity for Scotland to decide how it wishes to structure its own approach to IP regulation.

“In the coming weeks and months, we will be engaging with the relevant stakeholders to help shape our thinking.”