Money down the drain?

0:00Wake Up To Money from BBC5 Live. Hello, welcome to Wake Up To Money. Sikir Starmer has told President Xi he wants a more sophisticated relationship with China. They've finished their meeting in the last half hour. We will bring you the very latest. Tesla reports its first drop in annual revenue as it drives towards a brave new world of AI and robotics. Inflation-busting water bills will be landing on our mats from April. So why are consumers being asked to turn on the tap? And we'll be talking about this record-breaking British artist.

0:36Oh yes, Harry Styles will play 12 nights at Wembley Stadium later this year. We'll hear why that might be a boost for grassroots music. Wake Up To Money with Felicity Hanna. Very good morning to you. Welcome to Wake Up To Money on Thursday the 29th of January. It's four minutes past five. Oh, there is so much to squeeze into the next hour. We'll be talking about everything from international trade to the price of what comes out of your tap. But there is always time to squeeze in your messages. So do get in touch with me this morning. Tell me what you're seeing with your water bills, whether you're happy with the service that you're getting.

1:13But get in touch with your thoughts on everything we're talking about this morning, from China to scams to Harry Styles. You know the drill. You can text me on 85058. You can send me a WhatsApp message on 08085 909693. And if you're on social media like X or Blue Sky, use the hashtag wake up to money and I will keep a very close eye on that. Now joining me this morning is Rachel Waring, Managing Director of Waring's Furniture based just outside of Norwich Morning. Good morning Felicity. And also Micah Curry, Head of Personal Finance for the digital pension consolidation firm PensionBee. Good morning.

1:49Morning. I won't chat to you both about water because I feel like our listeners will have plenty to say. And Micah, we've got loads to talk about with tech results this morning, But, Rachel, I'll just start with you because it has been a little while, I think, since you were last on the show. So just remind our listeners what sort of things it is that you make, that you supply. Well, yes, we manufacture and supply furniture to the hospitality industry. So that poor industry that is struggling a little bit at the moment due to some changes in the Chancellor's plans. But anyway, we supply furniture, so we produce it in our factory and we do installs and all sorts of services around it.

2:31And we talk a lot about hospitality and the various ways in which it's kind of struggling. It's having to adapt. It's having to change. Does that presumably feed down to your business then? Definitely does. It's a strange thing because it's very sad. I mean, we had the news that Revolution bars had gone into administration this week and we have that they have previously been a client of ours. And it is very sad when you see brands go. Now, whether that will reignite as itself or what tends to happen is someone else will come in and pick up those sites and it's sort of fresh blood into the industry.

3:07And that tends to mean that there's some refurbishment happening. So it's a little bit sad that sometimes there are actually benefits for my industry when things swap around a little bit on the high street. Oh, that's interesting then. So as these new businesses take over, I suppose that means you must be feeling fairly upbeat then. You think that as we lose certain brands, others will replace them? yes because it's an industry that people you know are always excited to work within there's always you know youngsters coming through who have a passion and most of these brands succeed when there's people behind them with lots of passion so yes so fresh blood into the industry and yes this month is 40 years since Wearing's Feniture was started so we're having lots of celebrations this year.

3:57Oh, congratulations. That's 40 years. That must be quite increasingly unusual. I guess so. I mean, it was my husband, you know, empty pad, pen, empty filing cabinet and a telephone and, you know, just started and had faith in himself. And, you know, I joined him when he'd been trading for about three or four years. So, yes, he just had a passion again. It's The youth, this is where we should be encouraging the youth because they have the energy and the passion and the drive. Well, they definitely have the energy, don't they? They've got all of mine. Brilliant. OK, well, we'll talk to you about how business is looking, how international trade is looking.

4:38When we just caught up on the very, very latest this morning, because we know that Prime Minister Sir Keir Starmer has now met with President Xi Jinping on the first of his three day visit to China. He's being accompanied by 54 representatives from across British culture, really, business, sport, other cultural areas, hoping to strengthen ties. Let's talk to Surinjana Tiwari, who's the BBC's Asia business correspondent. Morning. Good morning. Now, China is some hours ahead of us in the UK. That's why that meeting has already happened. They're not just very, very early birds. Just bring us up to speed with what's been happening so far today.

5:16That's right. There's been a flurry of activity in Beijing this morning as Sir Keir Starmer meeting Xi Jinping and coming out with a really some really positive comments about a more sophisticated relationship with China. And, you know, working to strengthen both the economic relationship, but also the political relationship as well, which is so important. Xi Jinping also said that the relationship has been through some twists and turns, which did not serve the interests of either country, but also alluded to the fact that, you know, the Conservative government perhaps weren't as open to working closely with Beijing.

5:58but saying that Labour governments in the past have made important contributions to the growth of China-UK relations and that they continue to do so with this essentially reset of business and economic ties. And it really is an important trade trip, Felicity. As you mentioned, so many business leaders there, some of the world's biggest companies, AstraZeneca, Jaguar Land Rover, as well as Holland & Barrett and Octopus Energy, HSBC as well. So you can imagine what both the UK and China are hoping to gain from this trip. Yes. And of course, China is one of the top three markets for Jaguar Land Rover alongside the US and the UK.

6:38So for some of these businesses, this is really, really an essential kind of trip. Is the prime minister expecting for, hoping for any concrete kind of results from the meeting this morning? Any actual takeaways or is it just to kind of warm up that relationship? Well, you know, face to face meetings are so important, aren't they? And I'm seeing a lot of optimism, a lot of enthusiasm about the trip, despite some of that scrutiny that Keir Starmer is facing back in the UK. Now, with all these business leaders, we are expecting some concrete deals, actually. We obviously had the Canadian prime minister not so long ago who managed to ink some really important trade deals.

7:19The UK will be looking for the same. But the timing is so important. Not only everything that's going on in the world with, you know, both China and the UK facing pressure from UK, US tariffs rather, and trade frictions there, but also the respective economies as well. Keir Starmer has struggled to revive growth in the UK. China similarly is facing a slowdown. So there's lots of opportunities for them to work together, especially in industries where the UK is very strong, like in financial services, and where China is very strong as well, like green technology, but still needs a little bit more.

7:57There is still a bit of an imbalanced trade relationship with China exporting a lot more goods to the UK. But the UK is hoping to change that with this visit and providing more things like financial services, education services, and as you mentioned, cultural services as well. Stay with us, Sir and Jana, because I just want to bring in Micah on that, because that's a really important point, isn't it? That trade deficit. The UK imports just massively more stuff than it sells to China. The trade deficit is currently standing at£42 billion, according to the UK's Department of Business and Trade. And that is double what it was, what the deficit was back in 2019.

8:35Is it a positive relationship both ways? Is it good for the economy? I think what's interesting, and that is that last point about bringing services to China. As we know, we are very much a developed economy, a service-based sector. And as China develops along that line, it will need more services like financial services. So there's definitely a benefit there. And it's not necessarily just about exports. It's about exporting services. It's a very, very good point, isn't it, Surinjana? One of the other points, though, that people will be really keen for Keir Starmer to raise with China is issues on human rights.

9:15But of course, bringing those up can cool the relationship that he's trying to warm up in terms of trade. So it's a tricky balance. That's right. And this trip is as much about political positioning as it is about economic outcomes. And Keir Starmer was very quick to say that he is going to address some of those human rights issues with China and that any sort of partnership goes hand in hand with some concessions on human rights on the Chinese side. but also there's the issue of the super embassy in London which seems to be resolved but again something that Keir Starmer has faced criticism for One thing that's really interesting actually we're expecting some sort of agreement on small boats and the Chinese engines that are used in those small boats and that's the kind of thing that gains Keir Starmer a lot of political capital at home but also something that he can potentially work together with the Chinese And from what I've seen so far, Felicity, Keir Starmer seems like a completely different person on this trip.

10:19He's very charismatic. He was making jokes on the plane on the way over. He took control of the tannoy. And last night he was out eating magic mushrooms, I think they're known. And they're only hallucinogenic if they're cooked wrongly. But he seems to be having a very, very positive and happy time so far. I'm glad that you clarified that. It's interesting, isn't it? Because Kistama is often described as being very much more comfortable and confident on the global stage than on the UK domestic front. But he has been talking about this trip to China as being important for being an outward facing country because that can, he was sort of specifically talking about how being outward facing and understanding what's going on in the world can affect the prices that people are finding on the supermarket shelves here in the UK.

11:13Exactly. I mean, you have to look at the slower growth, at the subdued investment as well. And China, again, not only a huge market for the UK services, but also a place for foreign investment. You know, there has been talk with people familiar with the talks as well of Chinese manufacturers perhaps using underutilized factories back in the UK, like in a joint venture with Jaguar Land Rover, for example, in order to sort of strengthen and expand that partnership. And let's all remember what's going on in the world as well. All of these leaders are under pressure from the US. As I mentioned, we saw the Canadian Prime Minister in China inking some very significant deals after a tumultuous period of time between the two countries.

12:01The South Korean president's been there. The German chancellor is expected to go to China as well. So we are seeing all of these countries under pressure from the US trying to search for new markets, new investments and new opportunities for their own economy. Surinjana, thank you so much for joining us on Wake Up To Money. Thank you. Surinjana Tiwari there, the BBC's Asia business correspondent. It's very, very interesting, Rachel, listening to that. It's all part of the sort of the changing global trade picture, isn't it? So much change being kind of lobs at the world's economy. by the White House.

12:37I know when it comes to China, you've been importing a bit less from China in recent years. Talk to me about that. Talk to me about how you're kind of managing your supply chain in this changing world. Yes, we have. And I think that people, the thing you have to understand is a lot of our large clients, we get audited based on the ethics of our company and our production and all of our systems. And, you know, everybody wants to have very, very clean hands and they don't want anything in the supply chain that is in the slightest bit risky. And that becomes quite difficult if any product is originated from China, because although we do visit our factories and we have representatives on the ground who go in and do inspections, not just on the product, but on the activity, it is quite difficult.

13:26So you have that concerns and some people who do actually block products that come from China, as well as because we do do export, you know, if any goods are of Chinese origin, obviously that can impact our goods if they are as part of our shipment going into America, for example. So it's not particularly beneficial to be investing big time into lots and lots more product coming in from China, as far as we are concerned. Micah, it's not just businesses like Rachel's that are having to adapt to a new world. We've just had some results from Hyundai Motor reporting a 40 % fall in fourth quarter operating profits versus a year earlier.

14:09And that's as a result of U.S. tariffs offsetting the positive impact of a weaker South Korean currency. So there's a lot for businesses across all sectors and all sizes to kind of chew over and understand and manage. Absolutely. I think what we are seeing, without a doubt, is an upending of the post-World War II order. And we can see that in the fact that trade relations are shifting, diplomatic tensions are rising. And we can also see that in the stock market. Now, interestingly, the areas that have really performed is the Korean stock market, so the Kospi index. It is one of the big beneficiaries of the AI boom, of the focus on those chips, and of course the gold market, which is really reflecting the gold price, which is really reflecting geopolitical tensions.

15:04We're getting lots and lots of messages on all the topics we've been talking about so far. Keith says, regarding the PM's trip to China, with the US being unstable and not so friendly, we need to find more stable markets to trade. Turning our back on the US is a step forward. I mean, Micah, people have a lot of strong opinions on this, don't they? People in both directions when it comes to who's leading America at the moment. But we can't really turn our backs on the world's largest economy. No, we can't. That would be risky. We know that the U.S. is still the dominant force. It accounts for 60 % of global stock markets.

15:44But geopolitical tensions are rising and there is an erratic way in how the U.S. president is making policy decisions. And that is having a massive impact on the market. So every time the president makes these statements around tariffs, he walks investors to the edge of the abyss and then pulls them back again. And it does seem that ultimately his policy decisions are being shaped by how the market responds to them. And again, you know, that was confirmed in the U-turn on tariffs last week. Let's just quickly talk about pensions. While we've got you on, Micah, because this is very much your area, and we had some really powerful reaction to yesterday's Big Boss interview with Antonio Samoas, the Chief Executive of Legal and General, which I believe I'm contractually obliged to say you can listen to in full on BBC Sounds, and you should because it's very, very interesting.

16:39But in that chat, Samoa has talked about how many British savers are not putting enough money away for retirement. And we had a lot of texts in from listeners, Micah, talking about just how challenging that is. Some people talking about being forced to take money out of their pensions ahead of their planned retirement age just to make ends meet. Other people saying they simply can't afford to pay into it in the first place. What's the answer here? Because I feel like this is the conversation we've been having for all of my career, that people simply aren't or can't saving enough into their pensions.

17:13Yes, there are no easy answers. And the fact that many people are struggling to afford to pay into pensions is both understandable. We've had the cost of living crisis. We've had really sticky inflation, financial constraints, and of course, a jobs market that is changing in the UK completely. The landscape is completely changing. Employers are less willing to employ people because of national insurance costs, because of the minimum wage cost. And also, artificial intelligence is just changing the landscape. So people are under pressure. And with that, they probably deprioritize their pension, which is really concerning.

17:53because in the UK, you know, less than 15 % of Brits know exactly how much they have in their pension and nearly 15 million people are under saving for retirement. Now, auto-enrollment was introduced to address that and it has been really successful in helping employees overcome that inertia because you are automatically enrolled in a workplace pension and the result of that more than 10 million people are saving and they're saving more. But what auto-enrollment didn't address is really adequacy, adequacy of income and retirement. And we know we've had a massive shift in the pensions landscape over the last 30 years from defined benefit pension schemes, those final salary Rolls-Royce pension schemes, to defined contribution pension schemes.

18:44And what that means in essence is that the responsibility for saving for retirement and building that pot no longer rests with the employer, but it rests with you, the employee. It requires a massive mind shift change that you need to save into a pot, you need to build that pot, and the risk around longevity, how long are you going to live, and the investment risks all sit with you. But also equally interesting is that there are millions of what we at PensionBee refer to as invisible workers. So yeah, I'm talking about freelancers, unpaid carers, those working in the gig economy who are falling through the cracks of the UK pension system because they are not being auto enrolled.

19:26Auto enrollment is built around the payroll. Yes. Rachel, what's your view on this? Because you've talked about sort of 40 years of building a business and you're self-employed and you're plowing everything back into a business. It can be very difficult to think can plan and save for the future? Yes, for me personally, I mean, my husband and I are obviously entrepreneurial. So we've kind of backed ourselves and sort of imagined that we're going to make our own wealth for our retirement. So we have never been huge investors in pensions. We have a small pension, but not particularly big pension.

20:02But I think the priority for us was building the business and getting a good income and that allowing us to invest in our home which then potentially could be you know an opportunity to downsize once we get to an age which can then release some capital which was quite scary when there was sort of vague rumors about capital gains being charged on your personal home which was you know just horrific for people like me that that was part of their pension plan. I don't think it was very popular. So that one got shoved. Thank goodness. Well, that was just one of the many rumours. So I think it is, for my children, I am encouraging them to buy their own home, because I think the thought of going into retirement without a property, a home that you own, where you are going to have to find rent every month, which with inflation, which you never know if it's another period when it's going to suddenly fly through.

21:02I think that is terrifying. So that would be my encouragement is own your home. 85058, if you want to join this conversation, a lot of you getting in touch already about water bills. Stephen on Blue Sky says, we probably pay too little for water, but we're still not really getting what we have paid for. And somebody else says, we might not be thrilled by our rising water bills in Scotland, but at least there are no payouts to shareholders. And they've linked to a BBC article from last week pointing out that Scottish water bills will rise by 8.7 % from April. Now, 80 % of people feel confident they can recognise a scam, but only one in four actually then checks a company out before handing over money.

21:44That is according to the Financial Conduct Authority, which is launching a new company checker tool. The idea is this tool will help you check if a financial services business is genuine and importantly, if it's authorised before you actually hand over any money. Let's talk to Dominic Cashman, which is a very useful name for this, Dominic, who's Director of Authorisations for the FCA. Thanks for joining us. Good morning. Good morning. Just explain then what this new company checker tool is and what problem you see it as solving. So our research shows that about 700 ,000 people a year might be losing money to investment scams.

22:22And the best way that they could protect themselves from losing money is to make sure that they're dealing with a firm that's authorised by us. So we've launched a new tool. It's a quick, easy way to be able to check if that firm is authorised and if it's authorised to do the thing that you want to do. And as you say, we've launched a new advertising campaign to let people know that and hopefully remind them in a fun way. It is a fun way, isn't it? It's got a sort of cartoon animation kind of vibe. It has. It's our friend Emile the Seal. I wanted you to say it. OK, I mean, I'm all for talking about scams.

23:02It's clearly people perhaps overestimate their ability to spot a scam. Just explain, though, how your tool, how does it avoid a business or a scammer rather pretending to be a legitimate business and fooling people that way and therefore perhaps making people feel even more confident handing their money over to criminals? So, first of all, this tool will highlight where we know about firms that are pretending to be other firms. So that will come up. That will come up on the tool. But also, if you're feeling nervous that the person that you're, you know, the firm is not the person, you can use the contact details which are on at all, and they will be the correct contact details for the firm.

23:42OK, but there are plenty of examples, aren't there, of scammers weaponising legitimate companies, creating clones of them, coming across as incredibly plausible versions of those businesses. Will this solve that issue? It may not solve all of that issue. We do see incredibly sophisticated scams out there, but it will help a lot of people and it will cut off a lot of those scams. Now, I moonlight for another BBC programme, Moneybox Live. And so I talk about scams quite a lot. And I've been talking to people who've lost substantial amounts of money through investment scams recently. And what's really stood out to me is a change in scams and kind of how scams work.

24:29We're seeing more kind of long term grooming of victims. Sometimes it's rather brutally called a pig butchering scam where somebody is kind of fattened, groomed over many, many months and then huge amounts of money taken from them at the last minute. And one person I spoke to recently who'd fallen victim to a crypto investment scam, he was being told by the criminal to ignore the warnings from his bank. He had been groomed so successfully and he was not a stupid person. He had been so successfully groomed that he was being told to subvert the security measures that should have protected him. Are we moving into a much more sophisticated kind of scam environment now where people are groomed for longer and then lose more substantial amounts of money?

25:20And it's really hard to tackle that with a simple online tool. It is hard to tackle that with a tool, but it's not the only thing that we're doing to tackle that. But part of it is encouraging people to really think carefully before they make investments, to check at the early stages before they get into the grieving cycle. And also to ask themselves, you know, there are behaviours that can indicate that it is a scam. Are people trying to create a sense of urgency or does it just seem too good to be true? I mean, those are always important things to kind of flag up that sense of urgency. But we do see that as well with, I suppose, lots of legitimate or more legitimate selling opportunities.

26:08What about, Dominic, AI and the use of kind of deep fakes and clones of people? I've spoken to other people who've lost money because they watched a video that looked like Keir Starmer saying, quick, invest your money in this. That is the kind of thing that is really sophisticated, really difficult to tackle and maybe needs more aggressive policing before it actually reaches the consumer rather than giving the consumer a tool and saying, oh, remember to go and check that. I think it's going to need a whole system response to be able to address things like those. We are working with the police.

26:42We need the tech companies to step up and perhaps also to use AI to be able to filter out some of the inappropriate stuff that we see on social media. The tool is giving people something that they can do now that will help now. And there are other things that we're doing to address the wider problems. Is there a risk of false negatives with your tool? Because I imagine it could be incredibly damaging for a legitimate firm's reputation if it got incorrectly labelled. Who's doing the labelling? Who's checking out these companies? So we are checking out all of the companies that are authorised. Every authorised company checks every year the details that we hold on them and that they are correct.

27:25So we work extremely hard at the accuracy of our data. I couldn't guarantee that there wouldn't be a very small number of problems. But any firm who thinks there is a problem should contact us and will work really hard to fix it very quickly. Dominic Cashman from the FCA, thank you very much indeed for joining us. Thank you very much. Thank you. Rachel, I'm going to squeeze in a quick question to you here before we go to the news, because we're talking about individuals and scams. But I know that as a business, it's something that you've had to be quite cautious of. honestly it is continual and i think that you have to make sure that everyone in your team is fully trained and just a quick warning because it's personal tax payment week there's lots of scams and it happened to us before on the you know the 31st or this week it'll be today or tomorrow because they'll pretend that they're your bank and that's some the money that you're trying to pay to somebody's paying hmrc out of your and it all seems so legitimate so watch out for anything that mentions HMRC.

28:26And yes, training within all your team because it can happen sort of somebody quite junior can accidentally do something and that is absolutely traumatising for them personally. So yeah, it is terrible. I think this FCA tool sounds a brilliant thing to add to in-house training. Great. Well, useful to get your perspective on that. And of course, scammers quite often they use what's in the news to kind of make their scams fresh and make them extra plausible. Wake Up To Money with Felicity Hanna. Good morning. If you're just joining us on Wake Up To Money, where have you been? We've had a really good chat in the last half hour, but you are not too late to join in our big conversation this morning.