View more on these topics

Hutton backs 0.3% target as it rules out ‘high-cost advice’

Work and Pensions Secretary John Hutton has endorsed Adair Turner’s vision for a 0.3 per cent charge on the nat- ional pension savings scheme and the removal of advice.

Speaking at the Work Foundation pensions conference, Hutton claimed that the 0.3 per cent figure was a realistic and sustainable target as it rules out “high-cost” advice.

He said that the reason why stakeholder had not been successful enough in appealing to lower-paid people was because advice was factored into the charges. Over the life of the product, this could reduce the total pension pot by a third, he said.

He said: “I think that the 0.3 per cent charges are realistic and reasonable aspirations. Turner has produced compelling evidence that charge costs can be reduced to this level by removing the need for high-cost advice.”

Hutton set out February 28 as the date for Government, opposition parties and the industry to come together to look at the alternatives to a Government-administered scheme that delivers a simple, portable and flexible product at these low charges.

He warned that the Government would have to factor in the NPSS’s effects on defined-benefit schemes and other defined-contribution schemes when drawing up proposals.

Hutton gave his clearest indication yet that the Government would raise the retirement age and also spelled out a timetable of speeches and events in March to tackle issues such as affordability and challenges to employers before National Pensions Day on March 18.

Recommended

Glasgow launches Mackintosh high income fund

Glasgow Investment Managers is launching the Mackintosh high income fund managed by Susan Anderson and aiming for a net yield of 5.5 per cent a year. The fund will have a portfolio of between 35-40 UK equity holdings, with a structure similar to the Glasgow Income Trust, which invests additional finance raised through a derivative […]

PFS search covers tied and IFAs

IFA Promotion chief executive David Elms says the Personal Finance Society’s new adviser search facility could struggle because it includes multi-tied and tied advisers. He says the find an adviser tool is seen as a rival to IFAP’s Unbiased offering but he thinks it will fail to attract third-party referrals because comp- anies will not […]

HMRC releases “confusing” guidance on turbo-charging

HMRC has released a guidance note on recycling of pension commencement lump sums which has been met with bewilderment.Hargreaves Lansdown head of pensions research Tom McPhail has labelled the guidance on what is known as turbo-charging as “anything but simple”.McPhail says a first reading appears to offer confusing guidance on when an increase in annual […]

Concern mounts at loss of consumer panel

Which? says proposals by the Department of Trade and Industry to combine several consumer bodies could dilute the voice of the financial services consumer panel and leave the public unrepresented in some sectors. Consumer Voice, the DTI’s proposed combined consumer protection body which is made up of the FSCP, National Consumer Council, Energywatch, Postwatch and […]

2

DB transfer shouldn’t be all-or-nothing

By Steve Webb, director of policy In my recent discussions with advisers, a hot topic has been the growing number of people interested in transferring their defined benefit pension rights into a defined contribution pension scheme. With many pension schemes offering eye-watering transfer values, this is likely to be an area of increasing interest. Yet […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment