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Pension firms blow gasket over turbo ban

The Chancellor’s measures to remove tax relief from tax free lump sums reinv- ested into pensions has been slammed by industry experts as unworkable.

The Government has given no guidance on how pension providers should police this practice, dubbed “turbo-charging”, which firms say leaves them in an imposs- ible position.

Scottish Widows head of pensions market development Ian Naismith says the measure is just a deterrent as it is impossible to determine whether a pension contribution is being paid out of income or is from the proceeds of a tax-free lump sum.

The Chancellor proposes to remove the tax advantages when lump sums are recycled back into funds in order to generate artificial levels of tax relief. The Government has also said that it will be introducing a package of supplementary measures to ensure pension tax rules close this loophole but no details have been released.

Norwich Union head of pensions Iain Oliver says: “The tax recycling issue has highlighted what little communication there is with the industry at the moment. In what way will providers be able to judge where money is coming from? This appears to be unworkable.”

Pension consultant Ros Altmann says: “How is Brown intending for the industry to police this? What it ultima- tely shows is that he got his figures wrong and as a result is in a mode of panic undoing everything that the Government does not like.”


Nvesta launches Global Titans product

Nvesta is launching a new open-ended high income investment aiming to give an annual income of 7.5 per cent gross plus the potential for capital growth. The Global Titans Income Enhancer allows investors to claim all gains against capital gains rather than income tax. If an investor utilises their whole CGT allowance they can receive […]

‘Misselling threat if A-Day is not delayed’

Advisers will be at risk of future misselling complaints unless A-Day is delayed, warns Alpha to Omega chief executive Stewart Wooles. He is concerned that IFAs are being forced to prepare for A-Day while the final details of the pension simplification rules have still not been released by the Treasury. Wooles says that following Treasury […]

IFAs facing new wave of with-profits complaints

The IFA sector could face a new spate of with-profits complaints after the Financial Ombudsman Service fined IFAs for failing to tell customers about MVAs that were being applied to existing policyholders when they sold policies, according to Aifa. The concerns stem from a series of recent cases where the FOS upheld complaints against IFAs […]

Tinker, tailor

It may be best to outsource portfolio management to a multi-manager where an IFA does not have investment expertise

Leading Edge – April 2017

There is little doubt 2017 will be a year of political uncertainty. Leading Edge is Royal London Asset Management’s regular review of investment markets. This edition explores some of the impacts that this uncertainty is having on investors, from the pitfalls of prediction within UK equity investing to the dangers of opting for convenience over […]


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