View more on these topics

Pension firms set out their early access alternatives

Pension experts have pitched alternative ideas to the Treasury in response to its call for evidence on its early access proposals.

Last December, the Treasury outlined four potential models to allow people access to their pension before age 55.

These include a loan model, a permanent withdrawal model, early access to the 25 per cent tax-free lump sum and a feeder fund model linking pensions to liquid savings products such as Isas.

Treasury officials have indicated that these proposals are unlikely to be pursued due to a lack of evidence about the benefits to consumers, Money Marketing understands.

This view has been supported by Standard Life’s response, which argues that current evidence is “incomplete, out of date and does not supp- ort the notion that early access increases the amounts that people save”.

Standard also says each of the four options outlined by the Treasury will increase prices on low-charge schemes such as Nest by around 25 per cent.

It puts forward alternative reforms, including allowing people to auto-enrol into a pension or Isa, cutting tax on inter-generational pension transfers from 55 per cent to 25 per cent and letting someone draw down their entire pension fund over three to four years to pay for care fees without having to meet the minimum income requirement.

Aegon has also submitted a radical “debt to savings” proposal which would allow savers to use employer and employee contribution to pay off debt.

Head of regulatory strategy Steven Cameron says: “For some people, it is perfectly rational to want to pay off debt before they start saving.”

MoretoSipps founder John Moret says: “Access to tax-free cash is going to be of only limited value to younger savers, so while it is an option that should be considered for hardship reasons and to help with buying residential property for first-time buyers, we need a clearer indication of how the Government sees short-term and long-term savings meshing together.”

Recommended

Cuckoo in the Nest

Seriously, I don’t know which website Mr Douglas visited (Money Marketing Letters, February 17) but it wasn’t ours.For the facts about Nest, your readers should visit: www.nestpensions.org.uk. Beware of imitations. Heather TilstonHead of media and PR, Nest Corporation

Four picked for external role

The Government and the Bank of England have named the four external members of the interim Financial Policy Committee. The FPC will be responsible for ensuring stability of the financial system under the new regulatory structure. It will be part of the Bank of England and will oversee the Prudential Regulation Authority. The interim FPC […]

4

Specialist fraud unit set up to monitor Qrops abuse

The Government has set up a specialist fraud unit to monitor Qrops due to concerns about fraudulent activity and irresponsible transfers. An internal ABI pensions note, seen by Money Marketing, reveals that HMRC has established a dedicated team to monitor the activities of Qrops amid concerns over “general abuse” of schemes acting outside the legislation. […]

2

Confidence will be the central aim for the FCA

The new Financial Conduct Authority will have a central strategic objective of promoting confidence in the financial system and a number of other objectives including protecting consumers and facilitating market choice. The FCA, formerly known under the working title Consumer Protection and Markets Authority, will take on the FSA’s responsibilities for conduct of business and […]

China’s economic bounce may already be over

By Mike Riddell (17 May 2016) Most people would explain the rally in global risky assets since mid-February as being primarily down to the spectacular volte-face from the Federal Reserve, where Janet Yellen (and others) dramatically toned down their narrative that the Fed would be hiking rates as many as four times in 2016. This explanation […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com