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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A majority of independent financial advisers think there should be a single rate of tax relief according to this week’s Money Marketing poll. More than 120 advisers took part in the poll with 77 in favour of a single rate of tax relief, 39 against and six undecided. Yellowtail Financial planning managing director Dennis Hall […]
The FCA has issued a warning over ‘commoditised’ defined benefit pension transfers running the risk of unsuitable advice. In a letter sent to advisers holding pension transfer permissions, the regulator reminds planners that a “key area” of its focus is on pension transfers, and that it will later this year be contacting all firms to […]
Problems look set to arise for pension schemes operating relief at source