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Government change of heart over NI refunds

The Government has pledged to compensate people who pay more national insurance than necessary to qualify for their basic state pension after previously refusing to pay refunds.

Under the current system, people who fail to pay enough NI contributions to qualify for the BSP can pay additional “class 3” contributions to become eligible. The option is mainly taken up by women as only 49 per cent of women qualify for the BSP compared with 91 per cent for men.
The changes, outlined in the Pensions White Paper, will reduce the qualifying period for the BSP from 44 years for men and 39 for women to 30 years for men and women.
It could make extra contributions unnecessary for people who reach state pension age on or after April 6, 2010.
The Government has previously refused to compensate people who continued paying class 3 contributions for the nine months since the changes were announced if they have already accrued 30 years’ contributions or are likely to do so by retirement.
Speaking at the second reading of the Pensions Bill in the House of Commons today, Work and Pensions Secretary John Hutton said: “Some people who have paid NI contributions may not have done so in view of the changes to the eligibility requirements. We will make arrangements for NI contribution refunds for people in this position.”
Standard Life marketing technical manager Andy Tully says: “This is good as far as it goes but there is still an element of unfairness. If the changes to the eligibility requirements go through people will have been paying too much for years. The refunds should go back indefinitely.”


Hopes grow for Treasury rethink on PTA tax relief

Aegon Scottish Equitable believes the Treasury may reconsider its position over the withdrawal of tax relief on stand-alone pension term assurance.It is urging IFAs and providers to write to the Treasury and lobby against the U-turn by citing how PTA was helping to close the protection gap. Head of marketing, protection, Rod McKie says: “There […]

New CEO at Morley FM

Current chief executive at Scottish Widows Investment Partnership Chris Phillips has been appointed new chief executive at Morley Fund Management. He will commence the role in the summer, bringing with him experience of the UK fund management industry along with a proven track record of leadership, team-building and business development skills.Phillips is also currently chairman […]

Spoof top forecasts

One unnamed reinsurer with too much time on his hands has supplied the Diary with a detailed list of “spoof” predictions for the year, perhaps a little late.These include – the Chancellor allowing a new income protection product to be sold as part of a pension plan, Swiss Re pulling down the gherkin and moving […]

Direct action

In October 2006, we took the big step of exiting our network to be directly regulated by the FSA. We were advised to expect problems as application forms were difficult to complete and to expect delays of up to three months. We were also expecting to deal with a faceless conglomerate. What a surprise, therefore, […]

IHT: What were you doing in 2009?

One of the best sources of new business is your existing clients and, if they are estate planning clients, regular reviews are needed because people’s inheritance tax (IHT) problems tend to only get worse. Now, not a lot of things remain at the same rate as in 2009. If we turn the clock back, it […]


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