IN LAST week's battle for the hearts of the British public between Joanna Lumley and Home Secretary Jacqui Smith, guess who won? Having difficulties?
Let's try this one. They faced down the Nazis, hacked their way through the Burmese jungle, brought terror to the Taliban. Who came out on the winning side when they took on the UK Government? Well, it wasn't the Gurkhas that got garrotted.
Having
just returned from a few days in France, I can see why so many people are anxious to make the UK their home. Without intending to frighten anyone planning a trip to the Eurozone in coming months, the prices we were paying everywhere were eye-watering.
We spent in a weekend what we might normally spend in a week away, possibly even a fortnight.
I was prepared for the impact of sterling's devaluation. One pound is pretty much equivalent to one euro. But it was much worse than I was expecting. While we have endured or benefited (take your pick) from deflation, and endless sales and promotions, prices in France seemed to have risen significantly before you add in the currency movements.
You can forget finding a cheap hotel, and a bottle of wine at the budget restaurants, at which we ate, was typically ?18 (roughly £18). Similarly, those tourist menus which made holidaying in France such an inexpensive joy now typically start (if you are lucky) at ?18.
In some country places we stayed at, the tourist menus began at ?27.50 ouch!
And don't bother to leave the last day for the mad supermarket dash where you fill every last inch of the car with wine, cheese, jam and beer.
You'll find it all back home at your local Tesco and Sainsbury's at a fraction of the price.
Absolutely disastrousPERSONAL bankruptcies are now heading towards 24,000 for this year in Scotland, up well over half on 12 months ago.
And the outlook is not good. As Rob Caven, an insolvency partner at Grant Thornton, puts it: "With 160,000 unemployed, many owner-managed businesses in difficulty and two of Scotland's flagship companies and biggest employers, Royal Bank of Scotland and Bank of Scotland, having floundered, the numbers are likely to remain high for some time."
Some consumers took on far too much debt. It's doubtful whether many of them could ever have afforded to repay their borrowings. But now the economy has turned against them, it has become like the Smith versus Lumley battle. Hopeless.
It may even be worse than we suspect. Next week the Halifax will report that an astonishing 217,000 individuals have secret credit cards which they conceal from their partner. They use these cards to hide purchases from their other halves, or to hide debts they don't want them to know about.
The tables turn, though, when the bailiffs arrive. Patsy's reply in Absolutely Fabulous of "A crisp, darling, a crisp" to Eddie's assertion that she hasn't eaten since 1974 can take on a quite different meaning.
Hartford fearsHARTFORD Life's shock withdrawal from the UK market on Friday will be causing anxiety for investors with its variable annuity products.
The fund will close to new business and be administered out of Dublin, which has less rigorous compensation arrangements than the UK.
So what are investors to do? Along with Lincoln and Met Life, Hartford was one of three US insurers to launch into the UK with a variable annuity in recent years.
Essentially, these guaranteed certain levels of fund value, while allowing investors to withdraw an income, free from the constraints of a conventional annuity.
Plunging stock markets have left the guarantees it made on funds looking not only a bad bet for the company and those it hedged with, but potentially precarious. Will those backing the guarantees be able to pay them, and if not, where does that leave Hartford?
It also leaves investors with a major headache. Their underlying savings are, hopefully, safely invested. But they may only be worth, say, £80,000 or less, when their Hartford Life guarantee promises they will get, say, £100,000.
So should they get out while they can or hang on in the hope of fully realising a guarantee for which they paid dearly?
The Equitable saga taught us that guarantees from insurance companies are often not worth the paper on which they are written.
When investing, though, it pays to remember that some insurers, not least Standard Life, Scottish Widows, Legal & General and the Prudential, have met all the guarantees attached to their policies, even though it has sometimes cost them a lot.
