The LibDems have intensified their attack on the A-Day changes allowing residential property in a Sipp, with Sha- dow Chancellor Vince Cable branding the plan “wicked”.Speaking at a fringe conference event in Blackpool org- anised by the IMA, Cable said the move will encourage more people to invest in property at a time when many are already overexposed. The LibDems have campaigned for a reversal to what they see as a loophole in next April’s simplification and believe that the Treasury’s decision to hold a consultation on the changes is a step in the right direction. They claim that the move to allow residential property in a Sipp will cost the Treasury at least 500m a year, benefiting wealthy individuals at the expense of first-time buyers, rural communities and the general taxpayer. Cable said: “The decision to allow residential property in Sipps is wicked, as many people already overexposed to property will be encouraged to invest more in this asset.” He attacked the Government for “chickening out” of a review of endowment mortgages because of the costs. Cable also questioned the “fashionable view” among the Government and industry that there is a savings crisis and people should be encouraged to save more. He used the example of the 1980s, and the economic situation in Germany and Japan, as evidence of the problems created when people save too much and capital is not used productively. In contrast, Cable said that the US, which is seen as the most innovative and successful economy in the world, has virtually no savings. He pointed out that saving needs to be seen in relation to historically high levels of household debt, which is an issue that has to take priority. He said: “Do we actually have a savings problem? I disagree with the fashionable view that there is a crisis and people should be encouraged to save more.” He also said that the LibDems do not support the constant lobbying for tax breaks on new financial products as tax breaks have the effect of switching savings around rather than increas- ing the total. Cable reiterated the LibDems’ commitment to the citizen’s pension, accompanied by soft compulsion and a slow, voluntary move to later retirement. LibDem pension spokesman Lord Oakeshott, speaking at a Scottish Widows’ fringe event at the annual party conference, said: “The Treasury is burying its head on the issue. How much more evidence do they need that this is going to be a tax break bonanza for the rich, opening up the floodgates for high-earners to cash in?”
Britannic is launching a UK alpha boutique to be run by David Stevenson and Andrew Kelly of SVM.The boutique is to be run in Edinburgh in the same style as the firm’s London-based European boutique, under Barry Norris and Oliver Russ. It will launch a UK opportunities unit trust and a UK equity long short […]
Keydata’s secure income bond has been welcomed by the market because it provides a 7.5 per cent annual income, tax-free through Isas and Pep transfers and an even better growth option.
Pension Commission chairman Adair Turner used his speech at the Trades Union Conference in Brighton last week to emphasise the arguments against pension compulsion without ruling out the controversial policy. He told the conference delegates – many of whom advocate compulsion – that the weight of public opinion is firmly against compelling people to save […]
There was speculation this week that the legal battle between Equitable Life and its former directors and auditors Ernst & Young could reach a settlement.
The suitability of different estate planning solutions will depend on the individual’s own circumstances, needs and objectives. When considering the different solutions available there is a trade-off between inheritance tax (IHT) efficiency and access. Overall a flexible reversionary trust provides a greater level of flexibility than a discounted gift trust and can offer individuals a […]
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Another investment manager offering enterprise investment schemes has alerted clients of a 10 per cent drop in value for one of its portfolios following new Mifid rules. Mifid II, which came into force on 3 January, requires firms to notify clients when the overall value of their portfolio, relative to its value at the beginning of each reporting […]
The recent enquiry by the work and pensions select committee has reignited the debate about the future of collective defined contribution schemes. Whether these sort of schemes can be incorporated into the current UK pensions landscape is a moot point. Let’s consider some of the arguments for and against CDC. First of all, it is […]
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