View more on these topics

Equity Isas gaining ground on pensions

Britons saved more in stocks and shares Isas than personal pensions in the last tax year for the first time in nine years, according to the Office for National Statistics.

Figures from the ONS, published last week, show that £14.3bn was saved in personal pensions, excluding stakeholder, during the 2010/11 tax year while £15.8bn went into stocks and shares Isas. However, if stakeholder pensions are taken into account, pensions still come out on top with £18.03bn.

In 2009/10, £12.5bn was invested in stocks and shares Isas while £14.4bn was paid into personal pensions.

AJ Bell marketing director Billy Mackay says it is the first time that Isa saving has outstripped personal pension saving since 2001/02.

He says: “The figures are a clear endorsement of the success of Isas, which are simple and easily understood, and show how dangerous complexity can be for pension saving. The public likes simple products, a consistent set of rules and confidence that the product will not be the target of continuous Government attacks. If the Government wants pension saving to be successful, it must embrace those principles.”

Recent reports suggest that Chancellor George Osborne is considering reducing pension tax relief for higher- earners to help fund an increase in the income tax threshold to £10,000. But analysis from Standard Life indicates no single cut in pension tax relief would raise the £9.3bn needed to increase the threshold from £8,105 to £10,000.

Hargreaves Lansdown head of advice Danny Cox says: “There is no doubt that Isas have benefited from having a simple, straightforward set of rules while pensions have been subjected to constant tinkering from the Government. The decision to cut the annual allowance from £255,000 to £50,000 will also have had a significant impact on pension saving.”

Recommended

1

Merchant Capital confirms transfer of non-cash assets to Reyker Securities

Merchant Capital has confirmed that all of the non-cash assets worth £310m that were held with Pritchard Stockbrokers have been transferred to new custodian Ryker Securities, while cash assets are still frozen. Last month, Merchant Capital appointed Reyker Securities to handle client monies in its structured products division to replace Pritchard Stockbrokers after it was […]

Trail and tribulation

Aegon has warned the FSA will need to be careful about how it polices trail retention after the RDR and says the regulator risks skewing behaviour against keeping clients in suitable products. The FSA published a policy statement on the treatment of legacy assets last week which says trail will stop if advice leads to […]

Service to check social media compliance

Financial technology firm cloudFinS is recruiting IFAs for its pilot programme for new technology that aims to ensure advisers’ use of social media is compliant. The technology, cloudAMPLIFY, will measure how many people engage with firms via social media and monitor the information firms post to ensure it is complaint with the regulator’s guidelines. The […]

Neptune video: Indian valuations and Modi’s pro-investment agenda

Kunal Desai, Head of Indian Equities, discusses his expectations for the Indian market and highlights the key indicators that he is watching for 2015.

In the video, Kunal addresses:

• Indian equity valuations and the importance of stock selection in gaining exposure to the earnings upgrade cycle

• The BJP’s strengthening ambition in its pro-reform, pro-investment agenda

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment