View more on these topics

Experts fear worst for Browns Budget swansong

With less than two weeks to go before Gordon Brown’s “final” Budget pension experts everywhere are crossing their fingers and toes and hoping for the best.

The industry has lobbied furiously since December against the punitive pre-Budget proposals for alternatively secured pensions, which many commentators argue will effectively kill off the product as a viable alternative to annuitisation.

Just to refresh your memory, the Treasury imposed a massive 82 per cent tax on death benefits from Asps (including IHT) ensuring the product cannot be used to pass money to loved ones on death. It also introduced a high minimum income requirement of 65 per cent of the annual amount of a comparable annuity for a 75 year old.

Despite the fierce criticism heaped on the Treasury, combined with repeated attempts to demonstrate that the net tax take from Asps is in fact higher than for annuities, it would seem the lady is not for turning.

This was evidenced again last week, when the Treasury Chief Secretary Ed Balls refused Tory demands to reveal the fiscal calculations behind its Asp crackdown and said that doing so would be “prejudicial to the frank and candid discussions that are an essential part of policy development.”

All this has served to dampen hopes that the Government will do any more in the Budget than tinker with the minimum and maximum income parameters.

Indeed, there appears to be an overwhelming feeling of resignation, even among those that have been at the forefront of the campaigning.

Hargreaves Lansdown’s head of pension research Tom McPhail, for example, says the Government’s skewed rationale for introducing special rules for religious groups meant the industry never stood much of a chance of getting them to budge with rational argument. But, he argues, the industry had to give it a go and he is still hopeful the Treasury will allow more flexibility on the minimum and maximum incomes.

Syndaxi Financial Planning argues the industry has been “politically na” in thinking the Government was ever going to back down – as it has made its aversion to pension schemes being used for estate planning just as abundantly clear as its somewhat dogmatic fixation on annuitisation.

Following on from last week’s comments from Hargreaves Lansdown’s co-founder Peter Hargreaves about advisers missing out on the Sipp bonanza because of their addiction to indemnity commission, the firm has gone to ever greater lengths to ensure it gets the biggest slice of the Sipp cake possible.

The firm has hired a marketing company, kitted them out in Hargreaves Lansdown T-Shirts and sent them off to Canary Wharf tube station to persuade City big wigs to plough some of their bumper bonuses into a Sipp. The firm handed out 6,000 leaflets and says it has already won business as a result. It plans to repeat the exercise next Thursday at the same tube station and has printed out 12,000 more leaflets.

This, perhaps, highlights the potential for growth in the Sipp market but also underlines how competitive the marketplace has become – particularly for those advisers that have so far missed out on the so-called bonanza.

It also highlights the fact that commuting in London today has become a veritable minefield, with Hargreaves creating the London Lite of Sipp marketing literature. Which enterprising firm is going to launch the London Paper equivalent?

Commuters beware!


Treasury refuses to reveal its Asp maths

The Treasury has refused to reveal the fiscal calculations behind the crackdown on alternatively secured pensions.In a recent Parliamentary Questions session, Conservative Shadow Work and Pensions Secretary Philip Hammond asked Chancellor Gordon Brown to place Treasury working papers relating to the fiscal impact of people choosing to take Asps in the House of Commons Library.In […]

PYV offers new deals for advisers and brokers

PYV has refreshed its offering of PI products for advisers and mortgage brokers to reflect new deals for intermediaries.PYV chief executive Neil Pointon says advisers and brokers can benefit from reduced rates and better cover, including for GI activities, depending on underwriting criteria.Pointon says applications for cover have been made easier by a reduction in […]

Ethical winners

Ethical funds. Helen Pow considers the impressive performance of ethical investments.

China scare is not a bear, says Mobius

The sharp fall in Chinese stockmarkets last week is short-term profit-taking rather than the start of a bear market, says emerging markets guru Dr Mark Mobius.The sell-off in the Shanghai and Shenzhen stockmarkets followed concerns ahead of the National People’s Congress meeting this month that the government was planning a crackdown on foreign ownership or […]


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