in Pension Funds Insider
If you go to the doctor and get given a prescription, it's likely you'll take the medicine. If a qualified solicitor gave you legal advice, you'd probably follow it. But would you trust a financial adviser?
Maybe not. Why, since financial advisers belong, like doctors and solicitor, to a regulated profession? But that's not enough for most people. For a start, we're all too aware of the historical baggage for which the label 'mis-selling' was coined.
If our health is not so good, on the whole we tend to attribute it to misfortune, rather than feeling unfairly treated. By contrast, we're prone to compare our wealth (or lack of it) with that of others, and all too easily we find cause for complaint. "That's not fair" is a criticism to which everyone is sensitive.
For example, many women in their late fifties have been shocked to discover they would not be getting a state pension at age 60 as they had always expected; hence the WASPI and Backto60 campaigns. Over a million adults earning between £10,000 and £12,500 per year are not getting the tax relief they were led to expect on their pension contributions, because they've been enrolled into a scheme operating net pay. That doesn't seem fair either.
Then there is the gross disparity between members of Defined Benefit (DB) and Defined Contribution (DC) pension schemes when it comes to the Lifetime Allowance (LTA). The former can accrue an annual pension of £50,000, index-linked to boot, without becoming liable to an LTA tax charge. A DC pot of £1.055m (the current LTA) could barely buy a pension of half as much. . . .
11 June 2019 Read the full article