The glaring absence of tax-free cash in the Government’s vision for a pension savings scheme could prove the saving grace for advisers or signal the Government’s intent to scrap tax-free cash altogether.Hargreaves Lansdown head of pensions research Tom McPhail says it would be difficult for a savings scheme to be attractive if the private sector can trump it with tax-free cash. The omission of tax-free cash, or pension commencement lump sums, has brought concern that the Government could be looking to axe tax-free cash. McPhail says: “For the short term, I think tax-free cash is safe but in the long term I am not so sure.” Suffolk Life sales and marketing director John Moret says the national personal accounts scheme outlined in the White Paper already gives advisers little opportunity. He says that advisers could struggle to sell pensions if tax-free cash is stripped away, as this provides one of the few incentives for people to lock their money in a pension. Moret says: “If tax relief is reduced or disappears, the attraction of pensions will also reduce, making the whole picture for advice very uncertain.” Scottish Life head of pensions strategy Steve Bee says the issue of tax-free cash has appeared more frequently on the political agenda and in the House of Commons.
Increasing life expectancy cost the UK an additional 20bn in pension liabilities in 2005, according to research by KPMG.It shows a wide disparity between life expectancy assumptions by pension funds in the financial services sector, with a range of over five years for predicted life expectancy past age 65 for present retirees. In other sectors […]
The White Paper on pension reform features two distinct approaches to running a national pension savings scheme. Major proposals in the Government paper published last week include restoring the link between the basic state pension and earnings from 2012 “subject to affordability and the fiscal position”. The state pension age will rise to 66 in […]
The buy-to-let market does not require formal regulation, says Alliance & Leicester head of intermediary mortgages Merhdad Yousefi. He claims the current system where BTL mortgages are policed under the Consumer Credit Act represents sufficient consumer protection. The Treasury has yet to reveal any plans to regulate BTL although many industry commentators believe it is […]
Cummings hails the trade body’s successes one year after he became director general
Johnson Fleming has received the ISO 22301 accreditation, which demonstrates the company’s ability to effectively understand and prioritise the threats to the business.
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It is likely the increased regulatory scrutiny on fund managers’ value could filter down to advice firms in the future In my last article, I considered the influence a non-executive director could have in challenging an advice firm’s business model in light of the pension transfer issues. Now, in its asset management market study final […]
The financial services industry has failed to find ways of nudging consumers to think about their options at retirement, despite three years of pension freedoms. A panel at the Association of British Insurers retirement conference today lamented the way companies talk to people about pensions and the lack of engagement it inspires. ABI director general […]
The new chief executive of the single financial guidance body can expect a salary of £175,000 a year, according to a job advert posted online. The advert, posted on the Cabinet Office website says applications will close in mid-May with final interviews held in early July. The date for announcing the successful candidate has not […]