Money digest: today’s need-to-know financial news | 5 May 2016

If you’re frustrated about the slowness of your internet connection, take heart from this morning’s news that BT is to spend £6 billion over the next three years to roll out faster broadband and mobile phone services. BT has reported a 15 per cent rise in annual profits to £3.03 billion, helped by stronger demand for broadband and TV services despite criticism by consumer groups for high prices, slow broadband speeds and poor customer service. Total sales rose 6 per cent to almost £19 billion. Meanwhile, another £450 million is being set aside to compensate Clydesdale Bank customers for mis-sold payment protection insurance. It will take the total cost of mis-selling various financial products at the bank to £2.1 billion. Most of the money is coming from the National Australia Bank, former owner of the Glasgow-based lender. The Melbourne bank announced this morning that it made a half-year loss. The Times reports that pension investigators could latch on to the support provided by Sir Philip Green to BHS in the four years before its controversial sale for £1 to force the billionaire businessman to pay millions of pounds to fill a hole in the retailer’s retirement fund. John Ralfe, an independent pensions expert, said that a move in 2012 by BHS to make an explicit reference in its accounts to the ‘financial support’ it was receiving from Taveta, the Green family’s Jersey-based investment vehicle, could prove vital to legal attempts to force Sir Philip to increase his contribution to the BHS pension fund. The Pensions Regulator confirmed last week that it had begun an investigation into BHS using anti-avoidance powers that are designed to prevent business owners from dodging their responsibilities to staff retirement plans. Wonga is considering branching out into credit cards as it seeks to move away from its payday lending roots, according to The Telegraph. Credit cards are one product being considered by the company’s management team as it seeks to diversify revenue streams away from the business in which it made its name. Chairman Andy Haste confirmed that consumer lending via plastic is on the table, saying: ‘Credit cards are on the slate, but not until 2017-18,’ adding that its short-term focus is on products including insurance and revolving credit facilities. Wonga made a pre-tax loss of £80.2 million, up from a loss of £38.1 million in 2014. It has never really recovered from bad press in 2014 when the lender courted controversy over charging several thousand per cent APR for its payday loans and charging customers for ‘fake’ legal letters. Over on the Thisismoney website is the news that someone found guilty of drink driving can receive charges of up to 14 years imprisonment, unlimited fines and a ban from driving – but people who feign injury to make an whiplash claim are perceived to be just as bad. This is according to a poll by Aviva, which found that making a bogus personal injury claim is as unacceptable as getting behind the wheel over the alcohol limit.

The study of 2,000 UK adults revealed that 87 per cent believe it’s unacceptable to make a false whiplash claim, compared to 88 per cent who said the same about drink-driving.

The website also reports that rents have continued to rise steadily across Britain after George Osborne’s tax rises for buy-to-let landlords. But concerns that landlords would increase rents substantially in a bid to recoup their losses have so far been ‘unfounded’, according to insurer HomeLet. It said rents on new tenancies signed on rental property outside London during the three months to April were on average 5.1 per cent higher than a year ago, up from 4.9 per cent in March. It means the average rent across the country – excluding London – now stands at £764 a month.

Finally, there’s a sliver of good news for workers today. Almost a third of UK professionals anticipate taking a sabbatical of at least six months from work before they retire, according to new research commissioned by Investec Wealth & Investment. Travel is the main driver behind taking a sabbatical, cited by 51 per cent of respondents, followed by more family time (30 per cent). A quarter of professionals are looking forward to taking an extended break between jobs and a fifth plan to use the time off to study and learn a new skill. One in ten said their sabbatical would be enforced by their employer.