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Misselling warning as Isas win over pensions

IFAs selling pensions to basic-rate taxpayers could be guilty of misselling as Isas will be more attractive under the new Inland Revenue regime, leading pension consultant Ros Altmann is warning.

Altmann, a former adviser to No 10 Downing Street, says it is a good job that stakeholder has not been a success as anybody in its target market is likely to be assessed for pension credit.

She warns that the Revenue&#39s taxation simplification proposals, with the £1.4m lifetime limit and annual contribution of up to £200,000 means most people will be better off saving in an Isa, using the funds if they need it before retirement and moving it into a pension later in life if circumstances merit.

Altmann says: “The Inland Revenue paper makes it easier to see the relative advantages of Isas over pensions. Selling pensions to the 80 per cent of the population who are basic-rate taxpayers and on target to be means-tested in retirement amounts to misselling. Pensions still will not be suitable for most under Sandler but it will be misbuying rather than misselling.”

Chartwell pensions adviser Gemma Bryer says: “Isas are more flexible than pensions but many people like the fact that they cannot get their hands on their money with pensions, otherwise they would spend it.”


Fortune Asset Management – Muzinich & Co&#39s Hedgeyield

Thursday, 6 March 2003 Type: Hedge fund Aim: Growth by investing in high yield corporate bonds Minimum investment: Lump sum $1m Place of registration: Cayman Islands Investment split: 100% in high yield corporate bonds Charges: Initial up to 5%, annual 1% Commission: Subject to negotiation Tel: 020 7355 2000

M&G and Cazenove team up for fourth time

M&G has added a fourth fund of funds to the multi-manager range it has established with Cazenove. The M&G Cazenove cautious managed portfolio aims to provide both income and capital growth. It invests 50 per cent in bonds and 50 per cent equities via a portfolio of between 12 and 17 funds. Examples of holdings […]

Premier Asset Management – Premier Extra Income Plan

Monday, 3 March 2003 Type: Capital protected bond Aim: Income or growth linked to the performance of the Dow Jones Eurostoxx 50 index Minimum-maximum investment: £7,000-£1m Term: Five years Guarantee: Original capital returned in full provided the index does not fall by more than 30% and returns to at least its initial level Return: 7% […]

Twenty firms declared in default

The Financial Services Compensation Scheme has declared 20 IFA firms in default and is urging consumers who feel they are due redress to make a claim. Full details of the firms and how to make a compensation claim are on the FSCS&#39s website.

Guide cover

Guide: how to… communicate with your pension members

Effective communication of your pension scheme is a large part of getting auto-enrolment right. Delivering the same message to all employees is not necessarily the way to go. To assist you with the communication of your pension scheme, we have provided some key areas to think about, such as:

  • What to consider when segmenting your workforce
  • How to communicate to pension scheme members at the right time in their member lifecycle
  • What topics you should be discussing with your pension members
  • The new pension freedoms and the importance of communicating them


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