Industry Insights

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

Advisers see clients cut drawdown income amid Covid

Advisers have seen drawdown clients take stock of recent market falls caused by Covid-19 and cut their income levels to sustain their pension pots, according to Prudential. A recent poll by Prudential UK found that out of 170 advisers, 56 per cent reported that half of their clients in drawdown had chosen to cut their income levels as a result of the market shock. Advisers also flagged that an overwhelming majority (98 per cent) of their clients, who are about to or are already drawing an...

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Savers turn to planning as inheritance tax hike expected

Savers are expecting to see a rise in inheritance tax (IHT) rates as a way to offset the government’s coronavirus support measures, according to research from Savings Champion. A survey of 1,000 savers by the research firm found more than half believed it was “somewhat likely” that IHT rates will rise, while almost 30 per cent thought it was “highly likely”. Additionally, the firm found that the majority (70 per cent) of respondents understood the importance of inheritance tax planning, and 31...

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Just 10% of Brits pay for financial advice

Just 10% of British adults have taken paid-for financial advice, a YouGov survey from OpenMoney has revealed. The survey of over 2,000 people, on behalf of the online financial advice business, lays bare the challenge faced by advisers to prove their service is not just an expensive luxury for the wealthy. A key conclusion is that the so-called ‘advice gap’ – a phrase that covers all instances where a person could benefit from advice but does not or cannot – should be understood as a series of...

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Pension freedom inquiry launches with probe into scams

The Work and Pensions Committee has launched an inquiry into the impact of pension freedoms and level of protection for pension savers. The three-stage “broad inquiry” will investigate how savers are protected as they move from saving for retirement to using their pension savings under freedom rules. The inquiry will first focus on pension scams before moving on to accessing pension savings and saving for later life, with a call for evidence expected to be published next year. Pension freedoms...

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Lockdown sees clients wait months to access pension

Three quarters of savers have had to wait a month or longer to access their pension savings during lockdown, with advisers also experiencing significant delays. Research from consolidator PensionBee found out that of 961 people aged 55 to 70 surveyed, more than one in five had had to wait more than three months to receive their pension, while 14 per cent could not access their money for five months or more. The survey, which was carried out in April at the height of lockdown, also found...

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Rise in over-55s weighing property wealth for care funding

Over-55s are increasingly looking at property wealth to fund care, according to equity release adviser Key. In a March survey of 1,000 adults aged 55 plus, three in 10 (29 per cent) identified property wealth as a source of care funding, up 10 percentage points from 2019. Meanwhile, the proportion of over-55s looking to savings and investments and pension income as sources of care funding both fell by the same amount year-on-year, as Key cited a “combination of low interest rates and...

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Almost half of victims don’t report scams

Almost half of people who believed to have been targeted by a financial scam in lockdown did not report it, with many lacking the knowledge of who to report to, Aviva has found. The pension provider’s fraud report found 22 per cent of the 2,009 people surveyed had been targeted by suspicious communications, such as emails, texts and phone calls which mentioned coronavirus, equating to 11.7m people in the UK. But half of these did not report the scam to an authority or their provider as they...

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Consultation over ways of ending pension net pay anomaly

The government is seeking industry views on how to end the net pay anomaly in the pensions tax relief system which affects low paid earners. The Treasury has published a 40-page call for evidence which presents the options being considered to address the difference in outcomes between net pay and relief at source pension schemes. Members of relief-at-source pension schemes, who don't pay income tax, are granted basic rate tax relief of 20 per cent on pension contributions up to £2,880 a year....

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Unadvised drawdown ‘major issue’

Unadvised drawdown is the “key concern” for advisers four years into the pension freedoms, an Openwork survey finds. The network commissioned research agency Pollright to do a nationwide study of how advisers view the market. The increasing use of drawdown is seen as a major issue alongside access to advice and low levels of consumer understanding. The study finds 68 per cent of advisers say retirement savers who enter drawdown without advice is their key concern since pension freedoms started...

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Government knows ‘too little’ about pension tax relief

Pension tax relief costs around £38bn, but the government has not assessed whether it encourages people to save and how effective it is, the Public Accounts Committee (Pac) has warned. In a report published today, Pac suggests the government “knows too little” about the tax reliefs it provides. The committee has called for a review of UK pensions tax relief. It has recommended HM Revenue and Customs should assess the groups and sectors benefiting from all significant reliefs and publicly...

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