THE PENSIONS DEBATE

Ian Neale, Aries Director, is a frequent contributor to the debate in the national pensions press.  Read Ian's incisive commentary, and share his unique insights into the problems and opportunities of pensions in the UK.  Here is a recent sample to get you copied in. Ian welcomes your response - just click here to send him an email.

  COMBATING PENSION SCAMS

in Pension Funds Insider

Amid a minor flurry of government activity relating to pensions in the past week, a really significant publication passed almost under the radar. On 22 June the Pension Scams Industry Group (PSIG, originally the Pension Liberation Industry Group) released v2 of "Combating Pension Scams: A Code of Good Practice".

The original version published in 2015 set out the due diligence steps to be taken in order to help identify whether a receiving scheme is one to which a transfer payment should be made. Most schemes, providers and reputable advisers have adopted it. This update - which has been warmly welcomed by the Minister for Pensions and Financial Inclusion - incorporates the following key changes:

  • promotion of calling members directly as part of due diligence information collecting: an early phone call will usually help identify the reasons for the transfer request and the source and circumstances of the request.

  • expanding protection to include asking insistent customers to contact The Pensions Advisory Service (TPAS) for impartial guidance which will help them to better understand the risks.

  • recent developments: an update on QROPS regulations; the Hughes v Royal London judgment (which ruled that a member has a right to a statutory transfer even where no employment link exists with the receiving scheme employer); the growth in "international SIPPs" as scam vehicles; and acknowledgement of the government's proposed forthcoming cold calling ban . . .

03 July 2018   Read the full article

 
 
  COMBINING PENSIONS AND SOCIAL CARE

in PMI Pensions Aspects

Everywhere in the public sector seems to be underfunded at the moment. Services are 'collapsing', 'in crisis' and 'cut to the bone'. Reduction of central government funding, notably to local authorities, is often the immediate cause. But there are also underlying societal trends which are more profound and less amenable to short-term correction.

The economically active percentage of the UK population is shrinking. The rising incidence of disabilities and infirmities, fuelled by obesity and manifested in illnesses such as diabetes, is one factor. Another is the growing number of people who survive into extreme old age. More and more people need help with everyday living. Help at the moment still, by and large, requires other people, and people are expensive.

Many retired, elderly or chronically infirm people have to manage on a fixed income, often a quite low income, that cannot stretch to paying someone to help for more than a short time each week. State benefits don't go far, as a rule, and local authorities adult social care budgets, even with the maximum extra 3% council tax precept, fall far short of meeting demand.

Inexorably, as public sector workers are pressed ever harder, standards compressed, and services outsourced on price, the individual needing help is being squeezed as well: to pay more, and often receiving less in return.

So far, so familiar you might say, but where will it all end? Without descending into arguments about allocation of taxes . . .

May 2018   Read the full article

  PENSION FREEDOMS: GREAT, BUT IS IT WORKING?

in Pension Funds Insider

Ian Neale debates the ideas proposed by the WPC when it comes to deciding what to do with your pension pot.

The House of Commons Work and Pensions Committee (WPC) thinks pension savers need more help to make a good choice. Flexible drawdown can be difficult and expensive to access, and advice is similarly costly. The key question remains, who's pulling it all together? In a potentially influential new report, the Committee has come up with three big core ideas to address these industry issues.

The WPC believes that when it comes to deciding what to do with your pension pot, there should be a viable alternative between cashing it out entirely and spending it all on an annuity. Flexible drawdown ticks the box, but not every DC provider offers it. Among those that do, a competitive market has yet to develop, so there is no incentive for pension savers seeking a drawdown solution to shop around. Many are also reluctant to pay for advice, and so they tend to stick with the name they know.

The solution proposed by the WPC is twofold: first, that NEST should be allowed to enter the drawdown market, and second, that every drawdown provider should be required to offer a default decumulation pathway suitable for their "core customer group" by April next year, with charges capped at 0.75% as for auto-enrolment.

Neither the WPC nor indeed the FCA has put forward any idea of what this default drawdown route might look like. As such, many commentators have been sceptical because individuals' circumstances in later life are so variable, so defining a "core customer group" can become challenging. That might be less difficult when workers are being auto-enrolled, many for the first time, . . .

04 May 2018   Read the full article

Do you agree? Click here to send your response, question or challenge to Ian

 

Aries Insight Features
Aries House
29 Station Road, Desborough, Northants NN14 2RL
Tel 01536 763352
email: ian@ariesinsight.co.uk

 
ARIES BENEFITS
INFORMATION
INSIGHT
INSTRUCTION
INFLUENCE
INCLUSION
INTEGRITY
OUR OFFER