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Hargreaves Lansdown warns on &#39reckless&#39 trail grab

Hargreaves Lansdown has slammed Intelligent Money&#39s bid to claim back trail commission on personal pensions, calling its move reckless and warning that policyholders could be left facing a major tax bill.

IM was launched last month by Julian Penniston-Hill, who believes most IFAs do little to deserve ongoing commission. He has spent the last few weeks running a campaign urging IFA clients to sign over trail commission to IM, which will rebate the cash for a £35 annual fee.

But HL head of pensions research Tom McPhail says Penniston-Hill is acting “extremely recklessly” as the Inland Revenue frowns upon cashback being paid to pension investors. He says IM is effectively running the risk of misselling his service – which is seeking to rebate commission for most financial products – because policyholders could lose their tax privileges.

The Revenue confirms that it disapproves of rebated commission with personal pensions, saying it is only pre- pared for investors to be offered gifts under the value of £30. If this is breached, investors could be forced to give back the relief they have had and pay 40 per cent tax on the value of their pension fund McPhail says: “From our experience, he is acting extremely recklessly – investors could lose tax approval if they use IM. He should be careful.”

Penniston-Hill says: “I stand by my guns but if the Revenue has an issue then I will immediately roll out pension contracts which pay no commission at all.”


Friends Prov cuts bonus rates

Friends Provident is cutting bonuses on its with-profits policies with payouts falling by an average of six per cent.Regular bonus rates on its with profits “Main Series” products have fallen by between 0.25 per cent and 1 per cent. The changes see regular bonuses on its new generation pensions fall from 3.4 per cent in […]

Coventry Building Society – First Time Buyer &#45 4.99 Fixed

Type: Fixed rate mortgage Fixed term: Until February 28, 2009 Fixed rate: 4.99% Minimum loan: £1,500 Maximum loan: Up to 90% of valuation subject to a maximum loan of £200,000 Income multiples: Up to 3.75 times principal income plus second or 2.75 times joint Arrangement fee: None Redemption fee: Six months&#39 interest until February 28, […]

Penrose report finally near publication

The long awaited Penrose report into what went wrong at troubled insurer Equitable Life looks likely to be published the week of February 23. The 800-plus page report was expected to be made public earlier this month, but speculation over the weekend suggests it will be later due to the “legal complexities” of going through […]

Societies moving into offset mortgages

Two building societies are challenging lenders in the growing offset mortgage market with new products from Norwich & Peterborough and Coventry. N&P says it is the first society to link a current account with mortgage and savings accounts while Coventry&#39s product offsets savings against borrowing. N&P says its lifetime tracker product&#39s rate of Bank of […]

Derek Stuart: where to find value in the UK?

Derek discusses a number of Œself-help stories as examples of where he is finding good opportunities in the UK With the FTSE trading at historically high levels, many investors have questioned whether UK equities continue to offer value. But, as Derek points out, the headline figures mask many opportunities at a sector level. He has […]


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