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. […]
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The Financial Services Compensation Scheme has declared self-invested personal pension operators Stadia Trustees, Brooklands Trustees and Montpelier Pension Administration Services in default. The lifeboat fund has received around 150 claims for compensation relating to the three businesses. Those claims relate to how the businesses set up, operated and administered Sipps through which people invested in […]
The Department for Work and Pensions has confirmed it will not change the pensions triple lock and will explore bolstering the powers of The Pensions Regulator in the forthcoming legislative period. The DWP published its “single departmental plan” yesterday, which sets out five objectives it is working towards over the next four years. It has […]
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