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Industry Insights

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

Pension nudges could be linked to mortgage repayment

Pension saving policies targeted at homeowners who come to the end of repaying their mortgage could have “particular traction”, according to a report published by The Institute for Fiscal Studies (IFS). Rowena Crawford, associate director at IFS, described a “trade-off” between how much to save in a private pension versus how much to save for, or spend on, owner-occupied housing. According to a report co-authored by Ms Crawford and Polly Simpson, former research economist at the IFS, currently...

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Court of Appeal backs Pru’s £12bn annuity sale

Court of Appeal backs Pru’s £12bn annuity sale December 3rd, 2020 The Court of Appeal has overturned a High Court ruling which blocked the transfer of £12bn of annuities from Prudential, now M&G, to Rothesay Life. In a judgment published yesterday, the Court of Appeal rejected all the previous judge’s objections to the transfer, forcing the High Court to review the transfer. In March 2018, Prudential announced its plan to sell £12bn of annuities to de-risking expert Rothesay Life, covering...

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Warning on overseas advisers targeting Sipp transfers

The Financial Conduct Authority has sounded alarm bells after learning some overseas advisers are targeting consumers and recommending them to switch their UK pension into an international self-invested personal pension. The regulator said it was aware of overseas advice firms advising expatriates to transfer or switch their UK pensions, and warned it was concerned consumers would be exposed to high and unnecessary charges as a result. The City watchdog said anyone who was approached by an...

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Savers still clueless on pension charges, report warns

Savers still clueless on pension charges, report warns Nearly half (48 per cent) of pension savers do not know how much they pay to their provider in charges but are aware that some kind of fee is applied. Interactive Investor’s report into pension transparency found people were unable to state the charges they paid either as a percentage of their pension or in pounds and pence. The regulator has done lots of work on fees and charges on investment and pensions in recent years, highlighting the...

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Ditched pension reforms ‘bound to return’

Savers need not worry about how the pension scheme bill defeats will affect their pensions as it is “inevitable” these reforms will resurface soon, industry experts have claimed. The MPs in the House of Commons shelved a number of bill amendments, which could have seen savers better protected from scams and guidance becoming the norm. But Margaret Snowdon, president of the Pensions Administration Standards Association, said it was “inevitable” these measures will be introduced at a later date...

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Only a fifth of DB transfers proceed amid ‘advice shortage’

Only a fifth of defined benefit savers who requested a transfer quote proceeded with the transfer in the third quarter of this year, as people struggled to get the necessary advice, according to LCP. According to consultants LCP, in a “surprising” twist given the economic impact of Covid-19, the number of people actually transferring from their DB scheme, despite requesting a transfer value, remained low at 21 per cent. This was a slight increase from 20 per cent in the previous quarter but...

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State pension rise will go ahead in 2021

State pensions will rise by 2.5 per cent next year, the government has announced. In her statutory annual review of benefit and State Pension rates, Therese Coffey, secretary of state for work and pensions, confirmed the state pension hike, in line with the government’s manifesto commitment not to tinker with the triple lock. The new rates will come into effect on April 12, 2021 and apply to the 2021/22 tax year. She said: “The Social Security (Up-rating of Benefits) Act 2020 enables me to...

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How sustainable investing can help succession planning

A common interest in environmental, social and governance investing can help advisers connect with the younger generations. Research from Barclays Private Bank showed that although the ‘millennial’ generation was the driving force behind the shifting of family assets towards sustainable investments, all generations thought responsible investing was important. The bank polled 400 high net worth families in Q2 of this year and found while 70 per cent of older, wealthy generations said the...

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Flat rate pensions tax relief could see high earners £85k worse off

Rumours have resurfaced that the chancellor is looking to move to a 25 per cent flat rate for pensions tax relief, which could lead to higher earners significantly losing out. Analysis from Aegon found that under a flat rate of 25 per cent, a basic rate taxpayer paying £100 a month into their defined contribution pension would see this topped up to £133.33 rather than the current £125, an extra £8.33. However, a higher rate taxpayer who currently sees their £100 increased to £166.66 would see...

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Long-term effects of no-deal Brexit ‘worse than Covid’s’

The long-term effects of a no-deal Brexit on the economy would be “worse than Covid's”, according to the Bank of England governor. Speaking on a Treasury select committee hearing, Andrew Bailey said there was “reason to believe” the effects of a no-deal Brexit were longer term than the impact of the coronavirus crisis on the economy. He said: “I am rather more on the optimistic end on the Covid front. It takes a much longer period of time for the real side of the economy to adjust to the...

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