Pension wealth almost doubles over last decade

In Industry Insights by woateam

Total private pension wealth in the UK has jumped to £6.1trn from £3.6trn over the last decade but blemishes in the system remain. The latest Office for National Statistics figures reveal how savings behaviour has evolved. The data is from the sixth edition of the Wealth and Assets Survey, which has been running since 2006. On the positive side, it shows pension wealth is now 42 per cent of people’s total wealth, up from 34 per cent a decade earlier. Auto-enrolment has also bumped the proportion of people with an active private pension from 43 per cent to 53 per cent since July 2010. But the average wealth in active defined contribution workplace pensions has dropped from £11,600 (July 2010 …

Financial education ‘best way to encourage retirement saving’

In Industry Insights by woateam

Over two-thirds of advisers believe financial education is the most important way to encourage more saving for retirement, according to a Vitality Invest poll. A September survey of 200 UK financial advisers conducted by research group Opinium for Vitality Invest asked them to select the top three ways to encourage retirement saving. Financial education came out on top with 67 per cent, followed by better access to financial advice (41 per cent) and financial incentives such as rewards for saving earlier (37 per cent). Only 13 per cent suggested lower pension fees were one of the top three issues that could encourage clients to save. Alongside the adviser research, Vitality Invest had Yougov carry out consumer research of 2,000 adults …

Clients ignoring advice when making wills

In Industry Insights by woateam

Clients are often ignoring the advice they have received when making a will, according to research from Canada Life. The company spoke with 201 financial advisers in the UK, with 69 per cent of them saying that some or all of the advice they offered clients had been ignored when the client came to write a will, with only 8 per cent saying all their advice had been followed. Canada Life said if advisers were to collaborate more widely with solicitors and accountants, this problem could be tackled. Neil Jones, tax and wealth specialist at Canada Life, said: “There’s a historic disconnect between the key players when it comes to estate planning. “Solicitors, accountants and advisers all play important roles, but …

More than half of under-35s would benefit from advice

In Industry Insights by woateam

The majority of under-35s would benefit from regular financial advice, latest research suggests. In a study commissioned by the Openwork network, 53 per cent of all adults said they would want advice, rising to 61 per cent for the under-35s. Younger workers were also more interested in workplace guidance, with 51 per cent of 18 to 24-year-olds saying they would like their employer to offer support. However, only 12 per cent of adults see an adviser regularly, Openwork finds, where a gender gap also exists between men at 15 per cent and women at 10. This is despite nearly a third of all adults worrying they do not know enough about money and more than a quarter feeling unsure about …

Consumers put off annuities by life expectancy calculators

In Industry Insights by woateam

Life expectancy calculators could be putting people off choosing an annuity, new research has suggested. While the finding appears counter-intuitive, economists at Stirling Management School have found that among 2,000 people, using a life expectancy calculator offered by the likes of the government’s guidance service MAPS made them less likely to opt for a guaranteed income afterwards. Many would have thought that showing people how long they had to make their money last would lead them towards security, but that was not the case. Nearly three quarters of a control group bought an annuity, but this figure fell 8 percentage points to 65 per cent if they used a life expectancy calculator beforehand. More consumers also said making a bequest …

Government urged to cover pension tax bills for armed forces

In Industry Insights by woateam

The Forces Pension Society has called on the government to extend its temporary fix for pension tax issues for senior clinicians to the armed forces. Last week the government said it would cover the tax bills of members of the NHS Pension Scheme in frontline clinical roles in England in an attempt to fix the crisis surrounding the scheme. This was after it emerged in December that the number of members leaving the NHS Pension Scheme was five times higher than that seen by other public pension funds, most likely because of the tapered annual allowance, which reduces the tax-free amount high earners can put into their pensions. The Forces Pension Society, which acts as the pensions watchdog for the military community, …

The value of advice: a £47,000 uplift

In Industry Insights by woateam

Financial advice increases average wealth by £47,000 over a decade, according to a new report. Royal London commissioned the International Longevity Centre to quantify the value of financial advice for people’s overall income in the early years of the millennium. The report is an update of a study from two years ago and includes a wave of new data striving to answer a set of additional questions about what uplift planning can bring. The result comes from detailed analysis of the government’s Wealth and Assets Survey which has tracked the wealth of thousands of people in two-year periods since 2004-06. The wealth uplift from advice comprises an extra £31,000 of pension wealth and over £16,000 extra in non-pension financial wealth. …

HMRC warns of higher pension tax bills for savers

In Industry Insights by woateam

Many savers could be hit with larger than expected bills for not reporting pensions growth on their tax return, HM Revenue and Customs has warned. In its latest pension scheme newsletter, HMRC says it “knows that scheme members are forgetting to declare details of their annual allowance charge on their self-assessment returns”. This would include growth in their defined benefit pension rights as well as cash paid in to defined contribution pots. Mutual Royal London points out the admission means potentially thousands of people may have failed to declare large pension inputs on their tax return and could face a large bill when HMRC finally catches up with them. Any pension input above the annual allowance is charged at an …

Under-35s pessimistic about future of state pension

In Industry Insights by woateam

New research from Hargreaves Lansdown has uncovered the scale of the public’s pessimism regarding the future of the state pension. Only 28 per cent of under-35s and 35 per cent of those aged 35 to 54 think the state pension will still be around when they reach retirement. The provider commissioned analysis from consultancy Opinium that surveyed 2,000 people in October. The state pension is currently £168.60 per week or £8,767.20 a year. The triple lock guarantees it will rise by a minimum of either 2.5 per cent, the rate of inflation or average earnings growth, whichever is higher. An individual must have 35 years of National Insurance credits to qualify for the full new state pension. As of 5 …

Labour’s £58bn pledge to compensate women over pension age rise

In Industry Insights by woateam

Labour has promised to compensate almost four million women who lost out on thousands when the state pension age was increased. The so-called Women Against State Pension Inequality (Waspi) group born in the 1950s have been told that an estimated £58bn will be paid out over five years. Shadow chancellor John McDonnell said the payouts would settle a “historical debt of honour” for the affected women. The Waspi campaign has been ongoing for years, following changes brought in by the former coalition government. In an election special BBC Question Time, the prime minister was asked about the issue by the studio audience. Boris Johnson said he could not promise to “magic up” the money the women believe they are owed. …