The Prime Minister and the Chancellor have agreed to restore the earnings’ link to the basic state pension in a move which opens the way for a national pension savings scheme.The basic state pension is set to rise in line with earnings from 2012, later than Lord Turner recommended in his report, in a move that is being seen as a significant compromise by the Treasury. The deal lifts the biggest barrier to major pension reform after months of argument between Number 10 and the Treasury. However, next week’s White Paper is expec-ted to include room for Brown to manoeuvre by using his caveat on affordability. It also paves the way for the rest of Turner’s reforms, including his proposed national pension savings scheme and a rise in the state retirement age. Measures to placate the business community are thought to include full subsidy of NPSS employer contribution costs for the first five years for firms with fewer than five staff and concessions, paid for by the tax-payer, for those with fewer than 50 employees. Funding for the restoration of the earnings link will come from abolishing the option to contract out, except for final-salary schemes, and some of the savings made in the equalisation of women’s pension age. The link between the basic state pension and earnings was broken by the Conservatives in 1981 and it has taken strong political pressure and concessions around the timing of the restoration to shift Brown’s position. The LibDems have declared the deal “half-baked” as they claim it will only halt rather than reverse means-testing. Conservative Shadow Work and Pensions Secretary Philip Hammond says the move to use the contracted-out rebate to fund the plan is flawed as it creates short-term gain while taking on long-term liabilities. Former welfare minister Frank Field says: “This deal has everything to do with getting the Government through the next seven days and little to do with securing a lasting pension settlement for the next seven decades.”
Support service provider threesixty has launched a protection panel comprising Legal & General, Friends Provident, Scottish Provident, Scottish Equitable Protect, Standard Life and Scottish Widows. The panel will offer enhanced commission rates to advisers on term assurance, CI and MPPI products and will be a free service for threesixty clients. It will include a free […]
Equitable Life is set to offload its 4.6bn book of non-profit pension annuities to Canada Life as part of its ongoing restructuring. No money will change hands but Canada Life will take over responsibility for future pension payments on the 130,000 policies that are being transferred. Policyholders’ payments will be unaffected. Canada Life will reinsure […]
I spent last Easter week in Paris with my wife Andrea celebrating our 30th wedding anniversary – that is three years less than I have been wedded to the financial services industry. While I can claim that my wife is beautiful, I am not sure the same is true of my career.Perhaps it is the […]
We find ourselves in the middle of the awards’ season. I attended another ceremony last week and most of us felt that, save for a few notable examples, the short lists and awards lacked credibility.
Canada Life IHT Survey 2016 Only a quarter of wealthy Brits have sought professional estate planning advice to ensure their families don’t pay more tax than required More than a quarter don’t even have a will and just one in five have gifted money Many say they do not need these tools but families would […]
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Workplace savings and pensions business Punter Southall Aspire is to acquire Oxford-based IFA Focus Oxford as it outlines its ambition to set up a national advice service. The acquisition is part of the firm’s plan to integrate its retail advisory arm and corporate business. Focus Oxford has £200m of assets under management and the deal […]
Several independent boards of Baillie Gifford’s investment trust clients have written to the FCA about concerns with new Priips key information document rules. Baillie Gifford’s concerns relate to disclosure rules for the documents. It says these are based on past performance and could lead to investors being misled. Baillie Gifford compliance and legal partner Graham Laybourn […]
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