Developments in Employee Benefits law and practice

06 May 2019

Care system should adopt State pension model

In a new report for the Centre for Policy Studies, the Rt Hon Damian Green MP – who as First Secretary of State commissioned the Government’s social care green paper – puts forward a proposal to secure the future of social care.

‘Fixing the Care Crisis’ argues that the current system is financially and politically unsustainable, opaque, unfair, and actively discourages local councils from investing in social care and housing for older people.

The paper sets out that any reform of social care needs to:

  • Provide sufficient funding to plug the gap created by an ageing population
  • Be fair across generations and between individuals, ensuring that no one is forced to sell their own home and ending the ‘dementia lottery’
  • Increase the supply of care beds and the provision of retirement housing
  • Secure public and cross-party consensus

It argues that the care system should adopt the model of the state pension – with the Government providing enough support for a decent standard of care via a new Universal Care Entitlement, while encouraging and incentivising people to top up this provision from their savings or housing wealth via a Care Supplement.

Latest HMRC pension statistics

Registered pension schemes: cost of tax relief

This table shows occupational pension schemes in the public and private sectors, as well as individuals’ personal pensions. View the table.

Flexible payments from pensions

Number and value of flexible payments made from pensions since April 2015. The data reveals the number of flexible payments made from pensions increased in Q1 to 648,000 from 628,000 in Q4 of 2018. The number of individuals that received flexible payments also increased (284,000) and the total value of payments for Q1 was £2,060m. This is the second highest value per quarter, after Q2 in 2018 that reached £2,270m.

Personal pensions statistics introduction

This publication contains information on personal pensions, based on data that pension schemes are required to report to HM Revenue and Customs. 

Personal pensions: estimated number of individuals contributing by country and region

The table shows individuals contributing to a personal pension by country and government office region from 2006 to 2017.

Personal pensions: estimated number of individuals contributing by gender and age

Statistics showing individuals contributing to a personal pension by gender and age from 2006 to 2017.

HMRC publishes Pension Schemes Newsletter 109

HMRC’s latest newsletter contains information on pension flexibility statistics, relief at source for Scottish taxpayers and the authorisation of existing master trusts.

Parliament Briefing on annual and lifetime allowances for tax relievable pension savings

This Briefing looks at the annual allowance and lifetime allowance - which limit the amount that can be saved tax-free in a pension - and the reductions in those allowances since 2010.

The impact of these reduced allowances on some public servants – including the senior military, the judiciary, and NHS consultants and GPs – has featured in successive reports of the pay review bodies.

The BMA is concerned that the rules are “forcing some of our most experience doctors to retire, reduce their workload, abandon leadership positions and stop covering vacancies.” It has called for a “fundamental review of the current legislation around the annual and lifetime allowances” and has suggested some immediate and medium-term mitigations in the meantime.

In evidence to the Treasury Select Committee on 24 April 2019, Chancellor of the Exchequer, Philip Hammond, indicated that the Government was considering addressing the issue by means of more flexibility in public service pension arrangements. 

Pensions Regulator issues section 89 report over missed benefit statements 

The Pensions Regulator has issued a regulatory intervention report in relation to the failure of the Oxfordshire County Council Pension Fund (part of the Local Government Pension Scheme) to issue annual benefit statements to its members. Public sector schemes are required to provide annual benefit statements to active members within five months of the end of the scheme year. The Regulator's action followed a breach, where TPR was informed that no benefit statements had been issued to active members in 2014-15. This was attributed to poor data. 

Pensions Regulator master trusts market report 

The Pensions Regulator has published its regular monthly report about the master trust market.

At the time of publication of the report, only five schemes were authorised and 29 applications submitted and awaiting a decision.

Five schemes were granted a statutory extension to the application window. The introduction of the authorisation regime for master trusts seems to have led, as expected, to further consolidation of the market.

TPR action plan in response to Rookes independent review

The Pensions Regulator has produced an action plan in response to the independent review by Caroline Rookes of the communications and support provided to members of the British Steel Pension Scheme. 

View the five page spreadsheet action plan.

FCA call for input on review of financial advice market

The Financial Conduct Authority (FCA) has launched a Call for Input asking for feedback on its proposed approach to reviewing the Retail Distribution Review (RDR) and the Financial Advice Market Review (FAMR).

The FCA’s review will consider whether these initiatives have been successful in achieving their objectives. The review will look at what consumers want from the market and how the market works to deliver this. It will also consider how new market trends and developments might affect the future development of advice and guidance services.

FCA publishes discussion paper on intergenerational finance 

The FCA has published a discussion paper on intergenerational finance, which explores the changing financial needs of consumers across different age groups. The paper highlights the key socio-economic factors driving intergenerational differences, which are identified as: an ageing population, low interest rates, rising house prices, the changing nature of employment and student funding.
 

Contact:

John W. Wilson LLB(Hons) FPMI ACII, Head of Research| Email: john_wilson@jltgroup.com