Review of the year - November 2011

George OsbornePA

George Osborne was the man of the month. His Autumn Statement promised doom and gloom on a massive scale. The headline announcements included a 1% pay rise cap for public sector workers - following the two year pay freeze. The retirement age rise from 66 to 67 was brought forward to 2026. Working tax credits were largely frozen, and the promised above-inflation increases were taken back. Meanwhile, the capital gains tax threshold was frozen.

However the bad news didn't stop here...
We had a state bank sold at a knock down price, a seven year squeeze, bad news for those who ever plan to retire, and then the hugely controversial public sector strikes.



The strikes kicked off with a mass day of action in November. The nation was divided, as were the staff of AOL Money. Some argued that public sector workers must strike not just to defend their fair and affordable pensions but to keep valuable public services freely available to us all. Others, meanwhile, pointed out that the strikers are moaning about the generosity of their pensions, while the vast majority of us don't even have such a thing.

Working past retirement age

Retirement specialist LV='s Working Late Index revealed that 6.1 million of today's over-50s expect to work past the current state retirement age. The report found that on average, those planning to continue to work will do so for an extra six years, which could see them retiring at age 71 for men and 66 for women - based on today's retirement age. One in five over-50s said they expect to work for at least a decade past the current state retirement age.

Seven year squeeze

It emerged that average household incomes are set to drop by 7.4% in real terms between 2009/10 and 2012/13. The Institute for Fiscal Studies said that the median average income was now expected to be no higher in real terms in 2015/16 than it was in 2002/03, and that public sector spending would see a seven year squeeze until 2017."We are running out of superlatives to describe just how extraordinary are some of these changes," the think-tank's director, Paul Johnson, told a press conference in London.

Northern RockPA

Northern Rock sale

It was announced that a large chunk of Northern Rock is to be sold to Virgin Money group, which paid £747 million to get its hands on the bank. The eventual deal should net £1 billion for the Treasury. However, many commentators couldn't help but feel that this is small potatoes when you consider that we've poured £1.4 billion into the bank in the first place.

House prices to hit 2002 levels

Property broker Savilles predicted that over the next five years property prices will continue to drop. They weren't expecting any dramatic plunges, just a slow, miserable, creep downwards. By the end of the process, in 2016, they said the average price of a property will be £170,000 - which we last saw in 2002.


And the good news...

The government announced a new deal for the banks. The idea is that they will make banking fairer, and in among the proposals was a demand that they must not charge us a huge fee for going a few pennies overdrawn. The banks must also establish a system whereby they warn customers by text if there is any risk at all of them going into the red. Unfortunately we'll have to wait until September 2013 for any of the good stuff to actually kick in.
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