View more on these topics

Ritchie wants IFAs to take responsibility for advice on busting pension limit

IFAs rather than product providers should be responsible for advice where people take income to avoid the £1.5m lifetime fund limit says Scottish Equitable pensions development director Stewart Ritchie.

He believes that advisers should retain responsibility for the choice of annuity where a pension provider buys in a scheme pension.

People with funds over £1.5m after A-Day will be able to avoid paying the 25 per cent recovery charge on income up to £75,000 a year if the annuity is bought by the pension provider and given as a scheme pension, effectively raising the lifetime limit to around£2.5m for most people.

But Ritchie wants the rules to make clear that responsibility for the advice about which annuity funds the income should remain with the IFA.

Individuals with more than £1.5m who take a scheme pension will be able to exercise the open market option, and should be advised in this by their IFA, he says.

Ritchie says the new interpretation of the Finance Bill allowing money-purchase as well as final-salary pensions to take income of up to £75,000 a year – revealed by Money Marketing two weeks ago – complicates the decision whether to go into drawdown.

Ritchie says: “This is a pretty significant turn-round. We are now in a position where advisers have to consider whether to go into drawdown and be hit by the lifetime limit or take a scheme pension. I want clarification that it will be the IFA on the client&#39s behalf telling us where the scheme pension should be bought.”


Woolwich Plan Managers – Woolwich Capital Growth Plan

Type: Guaranteed equity bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £3,000-£500,000, Isa £7,000 Term: Six years Return: 30% of original investment at the end of year three if the index has risen by at least 30% or 107.5% growth in index at end of term Guarantee: Original capital […]

Standard Life interim results – life & pensions business down

Standard Life has released its interim results for the six months up to May 15 with reports of a 13 per cent decrease in life and pensions sales on the same period last year. UK investment is up 193 per cent, general insurance is up by 22 per cent but overall, the group has seen […]

McFall names 21 splits&#39 firms

Treasury Select Committee chairman John McFall has named 21 firms he believes are involved in the splits&#39 debacle. Speaking at a committee meeting last week, McFall said he believes it is important any information about the inquiry is put in the public domain and he gave a list of 21 firms he believes are involved. […]

Base line serves up mixed views

Brokers are split over the effect of base rate increase and the Bank of England Governor&#39s comments on house prices and buyer activity. Chadney Bulgin partner David Thomas believes Mervyn King&#39s comments have had as much effect on the housing market as the recent 0.25 per cent base rate rise. He says levels of transactions […]

Mark Page: why my biggest overweight stock is a discount Spanish retailer

Artemis European Opportunities Fund manager Mark Page is questioned about the merits of investing in Spanish supermarket group, Dia. Dia is a 7,000-store Spanish discount supermarket chain. But with cheaper food prices coming on to the market and an improving Spanish economy, journalist Alexis Xydias questions Mark about its inclusion in the Artemis European Opportunities […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment