Look beyond the pomp and procession that accompanies the annual Queen’s speech and there is usually, in saner economic times, something of a feel-good factor as the government outlines its programme of reform for the coming year. Not this time, however.

The new coalition government almost seems to feel its popularity is directly dependent on how tough it can be on reducing the deficit, unless you’re one of the unfortunate many whose jobs depend, either directly or indirectly, on public spending.

Inevitably, there was bad news for savers and this time it was unborn children that were hardest hit. The decision to reduce payments to child trust funds from £250 to £50 from 1 August – £500 to £100 for children from lower income households – and to abandon the scheme altogether from 1 January 2011 was widely predicted but will do little to encourage a new generation of savers.

It may yet prove to be a defining image for our new Prime Minister; I’m from the generation that was targeted by “Maggie Thatcher Milk Snatcher” in the early 1980s and I’ve yet to find the chivalry to forgive her penny-pinching exploits. I still remember the moment we were told there was to be no more milk to this day; something to discuss with a therapist when I have a mid-life crisis, perhaps.

There was bad news, too, for anyone born after about 1960 who is relying on the state to fund their retirement, with the news that the coalition intends to speed up the slow process of increasing the retirement age from 65 to 68, currently scheduled for 2046.

Details remain hazy at this stage but a similar scheme to Ireland, where state pension age will reach 68 by 2028, appears highly likely, as does a further hike to the age of 70 somewhere further down the line. The message to those who have no desire to spend their dotage at work is to make alternative arrangements pretty damn quick.

Energy savings

The government, though, does intend to press ahead with plans initially outlined under the previous administration to make loans available to those wanting to invest in carbon-reducing measures such as solar panels or insulation in their houses. A new green investment bank will be set up for this purpose, with the overall aim of helping the UK reach strict carbon emissions targets.

Aside from the environmental implications, this makes a considerable degree of financial sense, particularly in the current era of low interest rates on savings and cash ISAs and volatile stock markets.

Householders with south-facing roofs who install electricity-generating photovoltaic panels for around £12,500 can receive around £900 to £1,100 a year through feed-in tariffs, which came into effect in April, to the National Grid; effectively providing a 7-10% tax-free annual return in addition to lower energy bills.

The tax-free element in particular will appeal to higher earners, while payments are guaranteed for the next 25 years and linked to inflation. Those who generate a surplus of energy will effectively be paid twice for this, once for not using that of the National Grid and again for any excess energy put back into the system.

Other technologies will also qualify for the loan including wind turbines, solar water heaters and both air and ground-source heat pumps. Interest rates for the loan, which would likely be repaid on a “pay-as-you-save” approach over a 20-year period, have yet to be determined but should be around 6% and would be taken over by any purchaser should the house be sold. Dedicated mortgage top-ups may follow.

A more Equitable settlement

Lastly on the Queen’s speech front, the government has confirmed its intention to make compensation payments to more than a million people affected by the near-collapse of Equitable Life back in 2000. Payments will not be means-tested and dependants of those who have passed away in the meantime will be included, in what is a much wider-reaching settlement than the one proposed by the Labour government.

Meanwhile, thousands of people who lost money when the investment firm Keydata went bust in June last year have received money from the Financial Services Compensation Scheme. Over 90% of the 4,400 claims submitted so far were approved, and more than £42m has already been paid out.

The situation is less clear, though, for those who invested in Lifemark bonds, which were distributed in the UK by Keydata, but which are not covered by the FSCS as the company, which is now in provisional administration, is based in Luxembourg.

Summer blues

The spring and summer months are traditionally something of boom time in the housing market but almost as soon as we got a bit of sunshine evidence emerged to remind us that this particular sector may be built on rather shaky foundations.

Figures from the British Bankers Association revealed the number of mortgages approved in April was only marginally up on March’s level, with househunters instead choosing to wait for the outcome of the general election and focusing on paying off debt. For its part, The Council of Mortgage Lending reported a 12% fall in the amount of money loaned in April compared to the previous month, blaming Easter for the dip.

Coupled with a growth in the number of new properties coming on to the market, such stagnation could result in price falls and sellers being open to offers in the months to come.

World Cup flutter

Finally, Nationwide has joined in with the football fever that is starting to build across the country ahead of this summer’s World Cup by launching a four-year fixed-rate savings bond which provides an extra 0.5% a year if England bring home the trophy.

The product from the England team sponsor requires a minimum investment of £1,000 and pays a standard rate of 4.15%. The bonus would take effect from May 14 next year in the event the national side is successful.

In all likelihood this is a canny move by the UK’s biggest building society, as it would require Fabio Capello and his team to return victorious to make this a really attractive product. Staking any serious money on the fortunes of England’s defence or Wayne Rooney’s ankle seems slightly foolhardy, although in the current market 4.15% over four years is certainly not to be sniffed at.