View more on these topics

&#39FSA&#39s pay move could hit DB Confidence&#39

The FSA&#39s decision to give lower pay rises to members of its final-salary scheme could start a trend that will hit confidence in such schemes, warns Scottish Life head of pension strategy Steve Bee.

The regulator is increasing wages to members of the scheme by 4.2 per cent compared with 6.7 per cent increases for members of its money-purchase scheme.

The FSA says the move, which is believed to be the first of its kind, is designed to equalise the overall benefits given to final-salary and defined-contribution employees and reduce the deficit in its final-salary scheme which stood at £32m in March 2002.

It denies that the move is designed to encourage staff to leave the final salary scheme and says it is not setting an example for other companies to follow.

But Bee says the strategy will make final-salary scheme staff feel penalised.

FSA spokesman Robin Gordon-Walker says: “We look at pay and pension as a whole – other things being equal, the packages should be equivalent.

“People who are in the final-salary scheme have the option to transfer to the money-purchase scheme – its up to them.”

Bee says: “They are effectively paying people to leave. All the members of the FSA final-salary scheme should go and see an IFA about whether they should stay in.”


Only 1 per cent know how much they can save tax-free

Just over half the population knows they can save for the future tax-free and only 1 per cent thinks they can save more than £10,000 tax-free according to research from National Savings & Investments.The Treasury-sponsored savings provider says in any given tax year, people can save up to £63,000 tax-free. Investors are allowed to put […]

Capital investment bonds

These will be particularly useful because:- They are non-income producing – there is no need to make an entry in the annual tax return until a chargeable event gain is made, say on full encashment or a withdrawal of more than the cumulative unused 5% allowances; No personal liability to basic rate tax arises on […]

The earnings cap

A number of directors will have a keen interest in reducing both corporation tax (and also employer&#39s National Insurance) and personal levels of income tax. In particular, a number may enjoy a high level of earnings in excess of the earnings cap which has been increased to £99,000 for tax year 2003/2004. Where such directors […]

Qualifying policies charging for an exceptional risk of disability

When the terms of a qualifying life insurance policy are improved because the insurer discovers after it has sold the policy that it is not appropriate to charge for an exceptional risk of disability, the change in the policy&#39s terms can cause it to lose its qualifying status. This has never been the case where […]

Nobody expects the Spanish Inquisition

Paul Fidell, Head of Business Development (Investments), writes about one of the primary challenges for those involved in estate planning. He looks at dealing with investment uncertainty in these low growth, low inflation but still volatile investment conditions. Protection of capital, to leave something for beneficiaries, is a fundamental objective of many people’s plans for […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm