View more on these topics

Government must urgently clarify personal accounts advice costs, say MPs

The Government must urgently clarify the costs of any national system of generic advice that would underpin personal accounts, says the work and pensions committee.
In its report on personal accounts, released today, the committee said the Government had to set out its own estimates for the costs of the service, both in absolute terms and as a percentage of funds held in personal accounts.
It said if either the costs or quality targets cannot be achieved it “will seriously undermine the financial performance of, and public trust in, the personal accounts agenda.”
The report also calls on the Government to clarify whether it is considering some form of statutory waiver from misselling claims for personal accounts and if so how it would operate.
It also highlights the need for any generic information to include details of how to access personalised advice through an IFA.
The MPs expressed concern about a lack of clarity around charges for advice, collection and the third tier in the current proposals and called for the Government to be more open about its modelling and cost estimates.
With regard to the effect of means testing on personal accounts, the committee said it would await the work of the Pensions Policy Institute on the effects of increasing the trivial commutation and pension credit capital limits and calls on the Government to publish a detailed response once the work is finished.
The committee says it accepts the arguments from employers about not giving advice on personal accounts but the employer will have an important roll as the “first port of call” for information.
The report says any contribution cap should retain some flexibility to allow individuals to make extra contributions at certain times and suggests the Government should consider whether a separate cap, set substantially higher than £5,000, should be introduced for firms willing to pay more than the statutory minimum employer contributions.
ABI director general Stephen Haddrill says: “The select committee has rightly highlighted key areas in the Government’s proposals which need to be changed or clarified as soon as possible if our shared objective of more retirement saving is to be achieved”.

Recommended

Godiva lays bare six pledges to brokers

Godiva Mortgages has made six key pledges to brokers following its launch last week.Coventry Building Society’s specialist intermediary lender says there will be no overhanging early redemption charges, no differential pricing between channels and all products will be available to existing borrowers.All direct mortgage products will be available to intermediaries, there will be no cross-selling […]

Teamspirit hires new client services director

Financial services marketing agency Teamspirit has appointed former Liquorice director Mark Hollander as a client services director.Hollander will head up the team working on Prudential, NFU Mutual and Sesame accounts. He has worked for Ogilvy & Mather Direct and Evans Hunt Scottand his 15 year career in financial services marketing has included work for Britannia […]

Borrowers fail to get ongoing service

Mortgage brokers are failing to provide ongoing service to borrowers whose deals come to an end, says Accord Mortgages.The lender is urging brokers to put in place retention strategies, after it found two-thirds of borrowers were having to actively seek advice towards the end of their deal, rather than being approached automatically by their broker. […]

The muddled maths

The Chancellor failed to offer justice in his Budget to pension victims.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com