View more on these topics

Half of poorest workers would be worse off under the NPSS

Standard Life is calling for a radical overhaul of means-tested benefits and the basic state pension after finding half of the poorest workers would be better off saving in an Isa than the NPSS.

Research conducted by the company as part of its official response to the Pensions White Paper shows that 50 per cent of workers earning under 25,000 per year will actually lose out under NPSS because any money they save will reduce their entitlement to means-test benefits.

The figures from Standard’s research show that anyone over the age of 42 earning 20,000 a year or less would be worse off if they are forced to pay 4 per cent of their earnings into the scheme, as will 35-year-olds earning less than 10,000.

Standard marketing technical manager Andrew Tully says the complexity of means-testing and the state pension, means many people auto-enrolled into the scheme would have difficulty in deciding whether it would be better to opt out. Workers who do not retire on a full basic state pension will lose 1 of pension credit for every 1 they save in their own pension.

The insurer’s response, which is due to be published next week, will support personal accounts but call for changes to means-testing and a single-tier basic pension set at “a more realistic” level for low-earners.

Tully says: “There need to be radical changes. As things stand, it would be better for many people to invest in an Isa than in the NPSS.”

Comment

Recommended

SG combines five asset classes in protected product

SG Asset Management is set to launch a capital-protected fund which offers exposure to five asset classes. The Adequity best asset protected fund will be structured as an onshore fund providing exposure to the returns of a basket of UK and US equities, pan-European commercial real estate, hedge funds and commodities indices. Launching on November […]

Season of mists

This time of year has a habit of being difficult for investors. In recent years, we have had the aftermath of September 11, the Russian sovereign debt default and ensuing LTCM collapse of August/September 1998 and the 1997 Asia crisis – not to mention Black Monday in October 1987 and the Wall Street Crash of […]

Trusts: Easier than you think?

Protection providers often extol the benefits of placing plans in trust. The advantages for clients are widely recognised and numerous – inheritance tax mitigation, avoiding probate delay, controlling claim proceeds, and so the long, familiar list continues. Yet, dismissed as unnecessary form-filling, or simply viewed as irrelevant in the context of a mortgage sale, less […]

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