30 September 2014 So many people have been asking me about the new pension changes and what they might mean, I have put together a quick Q&A to address some of these with my comments. Hope you find it of interest. There are profound implications for pension products and pension savers – as well as for regulators of course, to make sure people understand what this all means for them. If in good health, perhaps you shouldn’t buy an annuity…
28th September 2014 Huge numbers of over 60s are opting out of pensions auto-enrolment, losing their employer contribution Budget pension reforms make pensions a no-brainer for most older workers as they can simply take the cash if they want to Need for financial education and advice greater than ever Figures just released show that nearly all younger workers are remaining in their employer pension scheme after being auto-enrolled, but many older people are opting to leave. According to…
Lifetime ISA might have been useful in the past but is not necessary now Pensions auto-enrolment and flexibility will increase pension coverage New ‘Lifetime ISA’ product proposed, to replace pensions and ISAs: The Centre for Policy Studies is calling for a new savings approach – the Lifetime ISA – to be introduced in the UK. This would replace the separate ISA and pension systems we currently have. The idea is unveiled in this paper http://www.cps.org.uk/publications/reports/introducing-the-lifetime-isa/?utm_source=Michael+Johnson+contacts&utm_campaign=1f6f756838-FTT_chown_lawson&utm_medium=email&utm_term=0_d781b4fd08-1f6f756838-303592833 by Michael Johnson, whose ideas…
20 May 2014 New Budget flexibilities dramatically increase appeal of pensions auto-enrolment Opt out rates should fall significantly ‘Buy-one-get-one-free’ deal too good to miss for most The Pensions Policy Institute has today published new research highlighting that auto-enrolment is now far more attractive than previously expected. Opting out of auto-enrolment is turning down free money: Even for older workers, who were the group least likely to benefit from staying in their employer’s scheme, the flexibilities introduced to pension savings in…
27 March 2014 Charges cap is important to protect smaller firms’ workers Will eventually need to control all charges, not just AMC Disappointing that NEST two-tier structure will continue to prevent easy comparison 0.75%pa charge cap on auto-enrolment default funds from April 2015 Banning penalty fees on leavers from April 2016 Banning commission payments from April 2016 As auto-enrolment spreads to smaller firms, their workers need protecting from high fees Pot follows member can’t work without a control on fees…
18 February 2014 DWP report on pension charges shows importance of introducing a cap Workers in small firms need protecting from rising charges as small funds pay higher fees Labour TER cap for new schemes makes sense but don’t set too low initially NEST reforms needed – and AMDs should be banned Summary DWP report on pension charges shows large schemes have lowest charges As auto-enrolment spreads to smaller firms, their workers need protecting from high fees Labour is right that…
11 November 2013 There are no controls on charges people forced to pay when buying their actual pension Far more money can be lost on annuitisation than saving 0.25% in fees 0.25% charge on £30,000 fund is £75pa but customers lose £600-£1000 when buying their annuity at retirement with no advice Auto-enrolment needs to ensure pensions are good value: There has been significant debate about capping fees and charges on auto-enrolment pension funds and estimates that people are losing chunks…
29 October 2013 In today’s Pensions Bill debate, Steve Webb anounced his ‘full frontal assault’ on pension charges. Here are my thoughts: It is of course right that people need good value pension schemes to save into with auto enrolment, but it is also important that we consider the losses they can sustain when buying an annuity. Buying the wrong annuity can be even more damaging to people’s pension funds than being in a higher charging scheme. There are no…
1 October 2013 Employers must be warned of complexity and need to prepare at least a year ahead Can’t leave it till the last minute as capacity crunch looms Significant challenges still remain despite promising start Aim to improve pensions for millions: One year ago today, the first and largest employers became legally obliged to automatically enrol their employees into a pension scheme and pay contributions for them too. This is a social policy which aims to improve pensions for…
23 September 2013 NEST charging structure may be responsible for failure to recommend a charge cap – NEST would not comply with a 1% cap! The long-awaited OFT report into pension scheme charges has finally been released – but its recommendations are disappointingly weak in terms of consumer protection. The OFT has done an excellent job in highlighting the excessive charges on older (particularly pre-2001) pension schemes but it has shied away from recommendations that would quickly bring them down….