The political parties and much of the populace are united in the belief that tough measures must be taken to control spending – but what is this likely to mean?

Austerity is pretty much the only game in town at the moment politically. In Greece and Italy it has been judged to be necessary to install technocrats from the European Central Bank in government in order to bring spending down. There is no danger of that in Britain, but that is not to say that we will not be feeling the pinch of austerity measures.

Rightly or wrongly, reducing the budget deficit has been set as a major priority. Polls indicate that there is a general consensus that this is necessary, and the problem of overspending is one that it is easy to visualise. In life if you are spending more than you are bringing home in earnings, then you are acting irresponsibly and getting yourself into trouble.

The length of time it will take to reduce the budget deficit to the levels deemed acceptable is likely to be longer than was first thought. It could be as long as a decade. Having that as the economic mood for the next ten years will certainly not be easy, and that is why it makes sense to start preparing for it sooner rather than later.

If you are currently in work then it makes sense right now to save absolutely every penny you can manage. This is not the message of ‘consumer confidence’ that the economy needs, but there are a lot of compelling reasons why it could be in your own self-interest.

There have had to be widespread pay cuts, pay freezes and lay-offs in the public sector. Obviously this affects those households where a public sector employee is a bread winner, those certainly need to be putting away all that they can because it certainly isn’t going to get any easier. It also however has implications for those working in the private sector.

Declining levels of real-terms remunerations combined with redundancies means that there will be lots of former public sector employees entering the jobs market. This is yet another way in which downward pressure will be being put on wages. Very few households are likely to see their levels of disposable income rise over the next few years.

Money being tighter is one reason why it makes sense to save now, but there are also others. Reducing public spending means that everybody is going to have to be much more self-reliant than they have grown used to being in the era of untrammelled spending. What this will mean is yet to be seen, but it is a sure bet that having some funds put aside is going to help. Returns on savings accounts are not the highest that they have ever been, but the value of having cash in reserve (in and of itself) is set to increase.

For the time being at least it seems as though ‘getting worse’ is the new normal. Everyone hopes that there will be a brighter future at some point, but in the meantime preparing for tough times ahead seems likely to be prudent.

Here are some helpful tips for retirees on how to maximize their savings and manage their money.

Retirement is supposed to be a time when you relax and enjoy the fruits of your labour, after having worked for many years. However, in recent years any pensioners who are trying to live on limited incomes are becoming uncertain about their future. When the financial crisis hit, anyone on a fixed income such as a pension has suffered from rising food and fuel prices.

However, with clever money management and planning ahead you can take control of your retirement finances and make sure that you will always have what you need. Here are some tips to help pensioners make sure that they manage their money well in their golden years:

• If you have some extra space in your home, consider renting out the room. You can earn thousands of pounds per year, and the first £4,250 you earn is tax free.
• Are you getting the best return on your savings? Check with your bank to find out if they offer better accounts designed for people over 50, which will offer you higher interest rates.
• Investigate whether it might be worth your while to switch bank account.
• If you are spending a lot of your money on energy bills, use a comparison website to see if you are getting the best deal. Use a site which is accredited by Energywatch to compare prices, and you could save hundreds of pounds per year.
• Some energy suppliers offer grants to their low-income customers for insulation and heating improvements which will increase the energy efficiency of your home.
• Downsize and move to a smaller home. Now that the kids have all grown up and have families of their own, you don’t need to be living in a large family home. By downsizing and moving to a smaller house or apartment, you will be able to free up a large sum of money for your retirement. You will also have a lot less property to clean and maintain!
• Be frugal! Look for sales at the supermarket, buy things in bulk to save, and buy used items instead of new. If you can reduce the amount of money you spend, you will be able to live comfortably on a lot less.
• Are you receiving all of the benefits that you are entitled to? Up to five billion pounds in benefits goes unclaimed every year by elderly people, and one in every three people eligible for pension credits fails to claim them. Find out what you are eligible for so that you can claim what you need.
• Take advantage of any senior citizen discounts, such as free prescription medicines, free bus passes, and discounted National Rail fares.

There are many ways that you can put yourself in a better financial position on a pension, so take control of your finances and enjoy your retirement!

It is one of the memes of our age that regulation is a cause of unemployment and an inhibitor to growth. Is there any truth to this, and what motivations are at play on either side of the argument?

In the United States there has long been a strand of political opinion that holds that all regulation as applied to business is harmful. Bills which introduce regulation of any kind, whether it be environmental, fiscal or to do with employee rights are branded as ‘job killers’.

There are states in the US where employees have significantly fewer rights than others. These states are branded as being ‘Right to Work’ states. The implication being that the absence of burdensome regulation means that it is that much easier for enterprise to expand, generating jobs that otherwise would have not appeared.

It has been claimed by certain commentators that in terms of hard evidence the case for saying that regulations should be stripped back for the benefit of the economy and therefore society is on the thin side. If, the opponents of the ‘regulations cost jobs’ viewpoint hold, if enterprises are in a position where  they would like to hire but are unwilling to because of regulations, there would be a great demand for increased hours among existing staff, however, so this strand of argument goes, this is not being seen.

Another empirical sign that regulation was stifling job growth would be that the kinds of industries where employment tends to be long term would be more reluctant to hire because of regulations that have yet to take effect. This has not been seen, and neither have other key indicators, according to the analysis of  Al Jazeera’s Dean Baker.

Over on this side of the pond the opinion that what is keeping levels of unemployment at their current unacceptably high levels is the existence of employment law, both home-grown  and of the imported European variety. The BBC recently revealed that a government report had been leaked which was calling for the abolition of the right of workers to sue for unfair dismissal.

At present if somebody is dismissed from their employment then they have up to twelve months in which to launch a claim for compensation over such employment disputes. The problem with this is that it is seen by some as promoting a culture where it is difficult to remove unproductive employees.

The other side of the coin is that there are benefits from job security, both to the economy and society. If a worker feels that they can be sacked arbitrarily at any point without compensation then it is hard for them to have the confidence to, for instance, commit to a mortgage, or to spend their some of their disposable income on the high street rather than save it.

Ultimately, turkeys will never vote for Christmas. There will always be calls from certain business leaders to do away with employee rights or other because it would be good for the bottom line. Whether these calls should be heeded however must be something that is given proper thought and considered in the round.