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MPs warn on dangers of auto transfer pension system

The work and pensions select committee has warned the Government’s automatic transfer pension plans could harm members by moving them onto higher charging schemes.

In its report on improving governance and best practice in workplace pensions, published last week, MPs welcome plans to tackle small pots but say some could lose out.

Last week, the Government set out plans to launch an automatic transfer system for defined contribution schemes under £10,000. It means some workplace pension pots will follow members when they change jobs, stopping the build up of multiple small pots.

The report states: “While we agree with the Government that people should not be auto-enrolled into poor quality schemes, it remains the case that people may be transferred from a scheme with low charges and good governance into a scheme with high charges and poor governance.”

Evolve Financial Planning director Jason Witcombe says “The solution is to offer members a choice of transferring when they move jobs so they know what they are moving into.” 



Letter to the editor: Long-running court battle continues

Money Marketing readers may recall my long-running fight against the FSA, which I am suing under the Protection from Harassment Act 1997 because the FSA, FSCS and FOS worked together to unfairly progress loss assessments and solicit pension complaints from former clients. The FSA has twice applied for the case to be dismissed, despite a […]

Vendors: FCA will not mandate electronic re-reg

Re-registration message vendors say the Financial Conduct Authority will not try to impose automatic re-registration between fund managers and platforms. Speaking at the Tax Incentivised Savings Association Exchange conference in London last week, Calastone and Euroclear both said although the regulator has made it mandatory to allow in-specie transfers, it will not go as far […]

E&Y: Providers to launch long-term care annuities ‘in months’

Providers will continue to shun the pre-funded care insurance market but could launch new “immediate needs” annuity products within months after the Government confirmed it will introduce a cost cap. Earlier this year the Government set out plans to introduce a £72,000 cap on long-term care costs from 2016. The means test threshold above which […]

Five face charges in £125m film scheme tax fraud

The Crown Prosecution Service has announced it is to prosecute five men in relation to a £125m film tax avoidance scheme. Following an investigation by HM Revenue & Customs, CPS deputy head of fraud Andrew Penhale confirmed charges have been authorised against Keith Hayley, Robert Bevan, Charles Savill, Cyril Megret and Norman Leighton. It is […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]


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