View more on these topics

Government may top up pensions for poor

The Government is proposing to subsidise lower earners with top up payments to ensure they remain within their occupational pension schemes.

The move is detailed in proposals for the rebate structure under the State Second Pension and follows concern that many of the low paid earning less than £9,500 a year, would be better off opting out of company schemes in favour of S2P.

To encourage the lower paid to stay in company schemes the Government will pay subsidies in the form of an increased top up via the S2P reflecting the difference between their actual earnings and £9,500.

The Government also set out the possible structure of contracted out rebates under S2P.

The proposals offer two approaches the first provides for subsidies for the those below the £9,500 lower earnings limit and then enhanced rebates to all other forms or contracted out arrangements.

But in return the occupational schemes will need to provide enhanced benefits.

The provides second provides the top up for those below the LEL extending and this top up to contracted out members earning less than £21,600 a year without the need for additional benefits.

Pensions minister Jeff Rooker says: “The paper sets out proposals for the future contracting out regime. They directly address the position of people on lower earnings who might be better off in the state scheme rather than in their existing private pension scheme.”

Liberal Democrat social security spokesman Steve Webb says: “Finally the Government has woken up to the issue of people on low earnings opting out of occupational schemes. They have finally shown some awareness of the implications of the effects that stakeholder and S2P will have on occupational pensions schemes.


Norwich Union – Equity Release (inserted 29/11/99)

Flexible Cash Release PlanType: Equity release scheme aimed at the over 60s.Minimum property value: £60,000.Minimum-maximum loan: Minimum of £10,000, subject to a minimum of 10% of the property value. Maximum of £500,000, subject to a maximum of 45% of the property value.Interest rate: 7.85%.Minimum-maximum age: Minimum 60, no maximum.Charges: Valuation fee £165 minimum. Application fee […]

Portman Building Society – Two Year Step Up Bond (inserted 29/11/99)

Two Year Step-Up BondType: Two-year bond with tiered interest rates.Minimum-maximum investment: £500-£50,000 (£100,000 for joint account).Interest rates: 6% gross in year 1, 7% gross in year 2.Term: 2 years.Offer period: Until further notice.Withdrawal penalties: No withdrawals permitted.Tel: 0800 807080.

RBS enters battle for NatWest

Royal Bank of Scotland has entered the fight for NatWest with a £25.1bn bid for the beleaguered bank.Bank of Scotland has already upped its bid and is now offering £24.4bn with bonus payments of up to £2bn also on the table.Analysts believe the less aggressive approach by RBS will be seen as more attractive by […]

Legal & General Bank – Easy Access Tracker Account (inserted 29/11/99)

Easy Access Tracker AccountType: Tracker account with interest rates linked to movements in London Inter Bank Offered Rate. Rates will be set at quarterly intervals until February 27, 2001 and 3 month LIBOR minus 0.5% thereafter. Monthly income option available on balances of £5,000 and above.Minimum-maximum investment: £1-£1m.Interest rates: 6.26% gross.Term: None.Offer period: None.Withdrawal penalties: […]

The Merchants Trust PLC – April 2017

Welcome to the latest update for The Merchants Trust PLC from the Trust’s portfolio manager, Simon Gergel. Portfolio Review The Merchants Trust reported results this month and the directors were pleased to announce a 35th consecutive year of dividend growth (subject to shareholder approval at the AGM). The Company is proud to be highlighted as […]


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