View more on these topics

Turner turning the screw on industry

The Pensions Commission’s final report is a disaster for the financial services industry and would force product providers into deeper cost cuts than the introduction of stakeholder and drive IFAs out of the equation.

Advisers and life offices have lined up to slam the proposals which were released on Tuesday by commission chairman Adair Turner. The plans would see providers having to slash charges to a level that could not fund advice.

The proposals for a Nat- ional Pension Savings Sch- eme with a 0.3 per cent ann- ual charge mean that the private sector would be priced out of the group personal pension market, effectively killing off GPP and group stakeholder business.

Employers wanting to opt out of the NPSS would have to match the terms it offers, so any employer opting for a scheme with a higher charge than 0.3 per cent would have to make up the difference through increased contributions. To keep a stakeholder scheme with a 1 per cent charge, the combined contribution would need to be 9 per cent.

Standard Life head of pensions policy John Lawson says the Turner report’s proposals are a complete disaster for the industry, cutting advisers right out of the market.

But the Pensions Commission has hit back at criticism, saying a pension scheme run on a 0.3 per cent annual fee would give individuals pensions around 30 per cent higher than current stakeholder charge levels.

Scottish Equitable pensions development director Stewart Ritchie says: “Turner’s target of a 0.3 per cent charge for the running of the scheme is heroic. It is good to be optimistic but he has to be realistic. There is little scope for advice within this charge.”

Scottish Life head of pensions strategy Steve Bee says: “Our employer-supported pension system is under threat by the proposed NPSS scheme. Why do away with something that is cost-effective relative to other forms of savings without taking into account the benefits of tax relief? BritSaver is only superficially appealing.”

Hargreaves Lansdown head of pensions research Tom McPhail says: “I would question whether Lord Turner’s propo- sals will ever get off the ground.”


‘Crackdown is forcing VCTs to cut quality’

VCT expert Martin Churchill claims a Revenue crackdown on investment deadlines may force managers to pay over the odds for lower-quality investments. HMRC has written to VCT managers saying it will no longer tolerate trusts failing to invest at least 70 per cent of their capital within three years. Churchill says 11 firms have avoided […]

Self cert consumers who inflate income face criminal record, says FSA

The FSA has warned consumers not to inflate their income to get a self-certification mortgage as they risk getting a criminal record.The FSA’s new mortgage website explains to consumers that they could be committing fraud, as well as being left with a loan they cannot afford, if they overstate their salary. To help consumers […]

The death of retirement – a boost for protection?

According to our recent report on the death of retirement, changes in workplace pension provision mean that coming generations of retirees could have a radically different experience of retirement from their parents. The average contribution rate into an old-style final salary pension was around 20% of total wages, the statutory minimum for a new automatic […]


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