View more on these topics

Advisers welcome Treasury U-turn on RPI-linked annuities

Advisers have welcomed the Treasury’s abrupt U-turn on plans to prevent savers using RPI-linked annuities without a floor to meet the minimum income requirement for flexible drawdown.

In May, Money Marketing revealed that tens of thousands of savers with index-linked annuities offering no protection against deflation would not be able to use these assets to fund the £20,000 MIR under draft regulations.

But legislation laid before the House of Commons on Friday says annuities linked to the retail price index will now be considered as relevant income for the purposes of meeting the MIR.

The new legislation will come into force on August 11.

Standard Life head of pensions policy John Lawson says: “Under the new legislation, annuities are allowed to vary in line with the RPI without having to have a floor for the purposes of meeting the minimum income requirement. This is a win for the industry and a win for common sense as well.”

Worldwide Financial Planning IFA Nick McBreen says: “This is a sensible decision. Excluding RPI-linked annuities did not make an awful lot of sense. Advisers now have a bit more clarity to plan for flexible drawdown when it does eventually take off with providers.”

However, under the new rules, investment-linked annuities without a guarantee will not count towards the MIR.

AJ Bell technical marketing manager Gareth James says: “The inclusion of RPI-linked annuities was expected and is positive news. It is disappointing that this good news will not extend to all investment-linked annuity holders. They will only be able to count the guaranteed element of their annuity, if such a guarantee exists.”

Recommended

12

Arch cru package does not hide FSA failings

For the second time, I am going to cite two documents that show Arch cru investors were entitled to a far better level of protection than they have experienced. For this, there is only one party to blame the regulator. From the FSA website: “Any money in an open-ended investment fund is protected by a […]

‘US likely to be downgraded even if debt ceiling is increased’

The United States is unlikely to keep hold of its AAA credit rating even if its government agree to raise its debt ceiling by the August 2 deadline, according to economic research consultancy Capital Economics. The US Treasury has warned that the government will run out of money to pay its bills unless the £8.7trn […]

S&P downgrades Greece by two notches

Standard & Poor’s has downgraded Greece’s debt rating from CCC to CC, a move which places the country just two notches above default. The ratings agency has also moved its outlook on Greece to negative, citing the restructuring plan as a selective default. S&P says: “The proposed restructuring of Greek government debt would amount to […]

Retirement fund - thumbnail

What price (more) freedoms?

George Osborne will make his last Budget speech of the current parliamentary term this week, and the early media briefings suggest that pensions will again feature heavily in that statement. So what are we able to learn from the weekend’s coverage?

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com