Pension guru Steve Bee says Government claims that NPSS savers will receive the equivalent of 8 per cent pension contributions on their earnings are a myth because they cannot save anything from the first £5,000.Bee believes the calculations justify his fears of future widespread NPSS misselling. Under current proposals, NPSS savers will have to pay in 4 per cent of their earnings, which will be matched by a compulsory 3 per cent emp-loyer contribution and 1 per cent tax relief. But under NPSS, the first £5,0044.52 of an employee’s salary to an upper earnings limit of £33,540 is not pensionable. This means that someone on average annual earnings of £25,000 will only receive 6.4 per cent while someone earning £12,000 a year will receive as little as 4.6 per cent and will have to work for over 20 years to achieve a pension pot over the trivial commutation limit. The latest calculation follows a “battle of the blogs” with Pensions Minister James Purnell over Bee’s claim that people in Personal Accounts could find up to 40 per cent of their savings clawed back through means testing on benefits. Bee says: “The idea people will get 8 per cent is a myth. Most people saving at that level will not do anything other than surrender their pension pots for cash under the triviality rules decades hence if our present system of means-tested pensions credits are maintained.” A DWP spokesman says “Enrolling employees into a low-cost savings vehicle like Personal Accounts could mean savers get a pension pot 25 per cent bigger than now. We estimate that by 2050, a regular saver on median earnings could be up to £50 a week better off than under the current system.”
In-Partnership has set up a mortgage arm. INnovate Mortgages promises members higher proc fees and improved service levels.
Lord Leitch is taking over as chairman of Bupa next month. Leitch, former chief executive of Zurich Financial Services, was already a director of the healthcare group and succeeds Bryan Sanderson.
In response to the letter by Michael Brayne of Brayne & Co in Money Marketing last week, Which? would like to put the record straight about how we conduct our research when mystery shopping financial advice. The research is designed to test the quality of financial advice available across the market. Therefore, it is essential […]
IFAs must genuinely embrace TCF rather than be pushed into it by regulation
Amanda wrote recently about those clients who need a little tough love – the ones who arrive at your door knowing how much cover they want and why they want it. What they seldom know is how much cover they actually need, what type of cover they should choose and the range of benefits available in the market. […]
- Top trends
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
Fiducia managing director on ‘good old-fashioned’ customer service in the digital world Anthony Scott is adept in the art of communication. As an adviser and a novelist (he has written the novels ‘On Ashover Hill’ and ‘The Birthday Gift’) it is crucial for the Fiducia Group managing director to engage and build a rapport with […]
The FCA has reiterated its warnings that advisers outsourcing defined benefit transfer advice to firms with relevant qualifications cannot divorce themselves from responsibility for the eventual recommendation. While existing FCA rules require additional qualifications to advise on DB transfers, and the FCA has written to all firms who have DB transfer permissions as part of […]
The Liberal Democrats have branded the government’s decision to delay a pot follows member pension system “incompetent”. The Liberal Democrat spokesman for work and pensions Stephen Lloyd MP says the move by pensions minister Guy Opperman shows how “rudderless” the current government is on pensions policy. Last October Opperman suggested the pot follows member initiative […]