View more on these topics

Safety net to pay just 21%

Transfer analysis shows that investors face massive losses in calls on Pension Protection Fund

Pensions which fall on the Pension Protection Fund will give most investors far less than the 90 per cent that many expect, says O&M Systems.

The IFA and software supplier says the findings come from testing its new trans- fer analysis report on clients. The tool offers advisers a predicted PPF figure to help advise clients whether they should move out of occupational schemes that are considered risky.

O&M Systems director Jason Wykes says analysis of figures from clients who are members of the troubled T&N scheme shows that some high-earners will get only 21 per cent of the value of their pensions from the PPF while even low-earners will receive only 74 per cent.

Wykes says if it is assumed by scheme members that they will only lose 10 per cent of the fund if a scheme enters the PPF, most would accept it, but if this loss is much grea- ter, then clients worried about the future of their scheme need to have it brought to their attention.

Out of the most recent 1,200 clients reviewed by the new tool, Wykes says the average that would be paid by the PPF was around 55 per cent of the fund.

The O&M Final Salary TVAS report is available as a free add-on service to adv- isers who are already using the software supplier.

Wykes says clients at both ends of the spectrum will be affected, with high-net-worth clients heavily caught up in the PPF cap on compensation, while poorer members could lose out as GMP benefits are revalued by the PPF, often at lower values.

Wykes says: “What matters is advice. You cannot offer a crystal ball to predict which schemes will get into trouble but you can point out to a client what he stands to lose.”

Scottish Equitable pensions development director Stewart Ritchie says: “As a general rule of thumb, the Pension Protection Fund cover is around 70 per cent and not 90 per cent for low earners. This O&M tool is invaluable for clients who think their scheme is vulnerable.”


Ami urges mortgage intermediaries to plan for Hips

The Association of Mortgage Intermediaries has created a factsheet to help mortgage intermediaries to plan for the introduction of home information packs. Ami is concerned too few intermediaries are considering the impact Hips could have on their business, and hopes the factsheet will encourage firms to plan ahead.Hip implementation could present estate agents, surveyors and […]

Fund firms’ ad attack to pick up Fidelity fallout

Fidelity’s competitors are launching a multi-million- pound marketing onslaught to go after redemptions from Anthony Bolton’s 5.5bn UK special situations fund. Merrill Lynch is running a 3m ad campaign with its latest poster featuring an envelope with the words, Special Delivery and the postmark “Delivered better results than 99 per cent of the sector”. Richard […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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