pensionsandsavings.com

  • PENSIONSANDSAVINGS.COM

    From Ros Altmann:economist and pensions,
    investment and retirement policy expert

    • pensionsandsavings.com

    pensionsandsavings.com

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    Category: Savers and Savings Policy

    Banks should immediately cut record high credit card interest rates to 0.5% and reduce overdraft rates to help customers weather this crisis

    Banks should immediately cut record high credit card interest rates to 0.5% and reduce overdraft rates to help customers weather this crisis

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    Two suggestions for banks to introduce immediately to help customers cope with the current crisis.  Reduce credit card interest rates to 0.5% Abandon plans to increase overdraft interest rates to nearly 40% Credit card interest rates are at record highs, despite the bank rate at a record low: Credit card interest rates are higher now than they were before the 2008 financial crisis. Unfortunately, banks have been continuing to increase the interest rates charged to credit card customers, even as…

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    Pension Scams – risks rising if more people at home and markets so weak

    Pension Scams – risks rising if more people at home and markets so weak

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    Pension scam risks increase with people at home and markets in meltdown.   More people likely to be caught by cold-calling or online scammers.  Urgent Regulatory action and early warning systems required to improve consumer protection. Parliamentarians support new All-Party Parliamentary Group on Pension Scams.  More people at home gives more easy targets for fraudsters: As more people are forced to stay at home during the current coronavirus crisis and investment markets have plunged, the risks of cold-calling criminals or…

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    Pensions tax relief changes – legacy of Gordon Brown’s pension raid should be a warning to the new Chancellor

    Pensions tax relief changes – legacy of Gordon Brown’s pension raid should be a warning to the new Chancellor

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    Removing higher rate tax relief from pensions is a lose-lose proposition which helps nobody and hurts millions.  Reforming pension incentives is enormously complicated and Treasury should beware of unintended consequences. Recent changes to Pension Allowances designed to reduce pension tax relief for higher earners  fuelled an NHS crisis, showing the dangers of chasing political headlines and short-term cost saving. Government should not be undermining saving incentives when debt is already at record levels.  Any reform of tax relief should improve…

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    Bank of England must not cut rates this week

    Bank of England must not cut rates this week

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    Latest forward-looking indicators are positive so using pre-election economic weakness to justify rate reductions makes no sense . Who will benefit from lower interest rates anyway? Mortgages may be cheaper but house prices and rents may rise, and banks have not passed on rate reductions to consumers. Higher credit card and overdraft rates and more consumers using buy now pay later schemes are weakening household finances. Apparently there is talk of the Bank of England deciding to reduce interest rates…

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    Govt commitment to reform NHS pensions may pave the way for radical pension tax relief reform too

    Govt commitment to reform NHS pensions may pave the way for radical pension tax relief reform too

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    Could Government commitment to sort out NHS pensions herald radical pension reform?  NHS problems are canary in the coalmine showing need to urgently change pensions tax rules.  Tapered Annual Allowance and Lifetime Allowance should be changed or abolished.  Reforming the £50billion annual cost of pensions tax reliefs (which gives top earners most help) could raise much-needed revenue AND improve pension outcomes. Reforms that could introduce new one-nation pension incentives and also save money include: Give everyone the same top-up to…

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    Time for Government to force pension firms to send plain English statements to their customers so they can understand pensions

    Time for Government to force pension firms to send plain English statements to their customers so they can understand pensions

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    Government should force pension firms to send simpler, standardised annual statements.   It’s time for pension providers to help customers understand their pensions, not leave them baffled by jargon. Pensions Dashboard will not work without standardisation – and accurate data.   Annual pension statements could be sent for customer’s birthday wishing ‘many happy returns’! New statements should be promoted and explained by national public information campaign. Showing forecast pension at two ages e.g 60 and 67 could offer positive behavioural…

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    Britain sinking deeper into debt as more consumers buy on high-interest credit

    Britain sinking deeper into debt as more consumers buy on high-interest credit

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    Ultra-low interest rates are not feeding through to individual consumers.   Since 2009, credit card lending now 40% higher and household non-mortgage debt up 52.6%.   Average adult pays nearly £1000 a year in interest as retailers increasingly use buy now, pay later. 40% of working age people have under £100 in savings and are vulnerable to any economic weakness. Should Regulators curb unsecured borrowing at high rates given indications that we may be repeating mistakes that caused the financial…

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    Implications of the Woodford debacle

    Implications of the Woodford debacle

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    Woodford Funds collapse highlights inadequate protections for ordinary investors.  Regulatory actions too little too late – funds with rising risks, falling liquidity and daily pricing need more timely intervention.   Clear warning signs in 2017 – Guernsey ‘listing’ for illiquid holdings was obvious red flag.    Does FCA have adequate powers to suspend management charges or penalise managers?    Loss of confidence in retail fund management industry may increase use of lower cost passive funds.    Inadequate protections for ordinary investors:…

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    Proposals to allow pension withdrawals for house purchase are dangerous

    Proposals to allow pension withdrawals for house purchase are dangerous

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    Encouraging younger savers to spend their pensions before retirement runs huge risks. Confusing shorter-term cash savings for house deposit with long-term investing for pensions will damage retirement prospects for many. People need pensions to supplement very low State Pension in retirement. More money for house deposits may be popular short-term but could just raise house prices further – boosting demand without expanding supply of homes for sale is not a solution. Don’t muddle pensions with house-buying: Policy proposals suggesting people…

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    Regulators and Government need to improve consumer protection – consider banning unregulated investments in SIPPs

    Regulators and Government need to improve consumer protection – consider banning unregulated investments in SIPPs

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    New Report highlights loss of trust in financial services, as savings rates reach record low.   Calls for regulators to put consumer interests first and pre-empt problems in pensions and finance, rather than dealing with losses after they’ve happened.   For example, banning unregulated investments in SIPPs could protect consumers better. Ros Altmann delighted to be appointed as Transparency Task Force 100th Ambassador.  Saving and investing for the future are an important part of social protection, to help people provide…

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