Industry Insights

Read the latest financial industry insights, hand-picked by the Wealth of Advice team… 

MPs step in over ‘troubling’ concerns at FCA

MPs have stepped in over "troubling" concerns surrounding the way the Financial Conduct Authority handles complaints from consumers. The Treasury committee revealed its chairman, Mel Stride, had written to the regulator and its watchdog, the Complaints Commissioner, addressing a growing number of complaints about the FCA. It follows a recent decision published by the Complaints Commissioner in which he warned of "serious delays and poor complaints handling" at the regulator. Mr Stride said:...

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FCA proposes value for money assessment for pensions

The Financial Conduct Authority is consulting on proposals to determine value for money in workplace pensions to ensure members are getting the best possible result. In a consultation paper, the regulator brought forward proposals to make it easier for both Independent Governance Committees and Governance Advisory Arrangements to compare pension products and services to determine whether members are being treated fairly. The FCA proposed a simple framework for the annual assessment process,...

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Savers urged to use ‘rule of thumb’ to keep pensions on track

The Institute and Faculty of Actuaries (IFoA) has developed a rule for savers to work out the size of pension they need for their desired retirement. According to the IFoA, people’s savings goals can be coupled with a rule of thumb that indicates whether someone is on track with their pension saving and, if not, to understand the extent of the gap so that remedial action can be taken. This rule of thumb works by an individual subtracting 12 from their current age, multiplying it by their...

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New call for flat rate pension tax relief

The Association of British Insurers (ABI) has urged the government to simplify the pension tax relief system, arguing it worsened existing inequalities in its current form. ABI commissioned research found the current system benefitted higher earners in particular and was less favourable towards women, the lower paid and younger workers. When paying into a pension, savers receive tax relief on any contributions they make, and under the current system tax relief is paid at the highest rate of...

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Call for action to get opt-out workers back into pensions

Employees who have opted out of their workplace pension during the coronavirus crisis should be encouraged back into saving more quickly than usual, MPs have said. The Work and Pensions committee urged the Pensions Regulator (TPR) to consider helping such workers re-enrol sooner than the current three-year timeframe under auto-enrolment rules. The committee believes this is important as many savers may have left their auto-enrolment pension during the crisis as a result of suffering financial...

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Warning as 9 out of 10 fail to seek pension advice

Savers are turning their backs on pension consolidation out of confusion, as a mere one in ten have sought financial advice in the past year, according to research. Pensions fintech firm Dunstan Thomas found three quarters (74 per cent) of Generation Xers, aged 40 to 55, have never consolidated any of their pensions. At the same time the firm's 53-page report, out today, found just 9 per cent of the 2,011 Gen Xers surveyed had consulted an IFA in the past 12 months, with 84 per cent tending to...

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Workplace pension saving on the rise

Auto-enrolment is proving to be a continuing success as a record number of employed workers saved into a workplace pension last year, but there are concerns about the self-employed. Data released by the Department for Work and Pensions (DWP) showed a record 88 per cent of eligible employees saved into a workplace pension in 2019, up from 87 per cent in 2018. This means 19.2m people were paying into a workplace scheme last year, an increase of 2.6 per cent from 18.7m individuals in 2018. The...

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Pathways must contain warning for savers, say experts

Investment pathways must carry a sustainable income level warning to avoid savers complaining if they exhaust their pot prematurely, pensions experts have stated. Bruce Moss, founder of fintech group eValue, said drawdown providers must go further than the Financial Conduct Authority’s “limited requirements” on investment pathways, and should put processes in place to stop savers unwittingly withdrawing an unsustainable level of income from their retirement pots. He said failure to do this...

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ISA rates drop to lowest level since financial crash

Average savings rates for Isas, easy access and fixed bonds have fallen to their lowest levels since records began in 2008 as dwindling interest rates and the coronavirus took their toll. Data provider Moneyfacts found the average easy access ISA rate at the start of June had fallen to a low of 0.45 per cent, from 0.85 per cent in January. One-year and longer-term Isa returns had dropped to below 1 per cent for the first time since December 2016, having fallen by 0.4 percentage points and 0.44...

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Warning that inflation slump will pave way for end of triple lock

A period of negative inflation could give the government the perfect opportunity to U-turn on its manifesto promise and justify scrapping the pensions triple lock, according to former pensions minister Sir Steve Webb. Sir Steve, partner at consultancy LCP, said chancellor Rishi Sunak could argue a period of negative inflation was the time to abolish the triple lock, or justify a smaller increase, because it would mean prices are falling and therefore pensioner living standards would already be...

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