News in Brief: Savings bonus, procurement research, RBS, asset based finance, profits boost

News in Brief

Budget 2016: Low-paid workers to receive savings bonus

Millions of low-paid workers who put aside savings could receive a top-up of up to £1,200 over four years, the government has announced.

Employees on in-work benefits, such as tax credits, who put aside £50 a month would receive a bonus of 50% after two years – worth up to £600.

That could then be continued for another two years with account holders receiving another £600, reported the BBC.

Meanwhile, the national minimum wage is also set to increase from October 2016.

The measures will be detailed in this week’s Budget, in which Chancellor George Osborne has already warned of spending cuts.

Price still key for procurement professionals

The role of procurement professionals may be changing but price will always be important to them, according to research by a global hotel solutions provider.

The report by HRS identified four areas of the hotel programme where procurement professionals are likely to encounter problems. The issue with inconsistent hotel pricing in the business world was one; numerous different rate types such public rates, corporate discounts, corporate club rates, negotiated rates, etc. can cause confusion and frustration for those in the industry.

The research stated: “With all these potentially different prices out there, many suppliers claim they can get the ‘best available’ rate. However, so many now claim this that the phrase has started to lose its meaning.”

The report advises procurement professionals the need for flexibility to choose between various rates and to be automatically guided to the best value on availability on that given day.

Jon West, managing director for HRS, said: “This report shows that more than ever before, today’s procurement professional possesses a much broader range of skills, and plays a more strategic role within their business. Of course one of their many responsibilities is travel – understandably something that they can often only commit a small amount of their time to.”

RBS to cut 550 jobs

The Royal Bank of Scotland is preparing to shed 550 jobs as part of a plan to replace staff who offer investment tips with so-called “robo-advisers”.

RBS, which is 73% owned by taxpayers, is shrinking its investment advice team by making the service available only to people with more than £250,000 to invest.

Some 220 jobs are expected to go in the division, with a further 200 to follow in its protection team, whose staff offer advice on products such as life insurance.

RBS is instead planning to launch a new automated system that will offer customers advice based on their responses to a series of questions, reported the Guardian.

The move is part of an effort to cut costs after the lender racked up its eighth successive annual loss in February 2016, when it fell £2bn into the red.

Number of larger businesses securing asset based finance up 25%

The number of larger businesses using invoice finance jumped by 25% in just a year, from 713 in 2014 to 893 last year, according to figures published by an industry body.

The Asset Based Finance Association (ABFA) found that because invoice finance is secured against invoices and other assets it is seen as a less risky form of finance for funders to provide; meaning large companies can get quicker decisions on asset based finance than traditional finance.

The ABFA revealed around 80% of asset based finance is invoice finance, in which businesses secure funding against their unpaid invoices, while the other 20% represents the fast-growing area of asset based lending, in which, in addition to debts, businesses can raise funding secured against a range of other assets they own, including inventory, property and machinery.

Jeff Longhurst, chief executive of the ABFA, said: “Asset based finance is now one of the primary sources of funding for businesses of all sizes. It is competitively priced and providers can also offer quicker decisions on asset based finance than on traditional unsecured lending.”

Fever-Tree’s global demand has boosted profits

Fever-Tree has said global demand for its premium mixer drinks has boosted profits in an "exceptional year" for the business.

Pre-tax profits hit £16.8m in the year ending 31 December 2015, up from £2.5m, reported the BBC.

Revenue was up 71% to £59.3m, from £34.7m in 2014.

Charles Rolls, the firm's executive deputy chairman, said its success was due to their customers' "desire to drink premium mixers to complement their premium spirits".

Tim Warrillow, chief executive of Fever-Tree, added: "2015 was an exceptional first full year for Fever-Tree as a public company."