Equitable Life Payment Scheme End | Consumer Advice Review

09 August 2015

Week ending 9 August: Equitable Life Payment Scheme to close | Review of consumer advice & other stories

Equitable Life Payment Scheme to close

The Treasury has announced that the Equitable Life Payment Scheme will close to new claims on 31 December 2015. It has published a policy statement setting out how the closure will be administered.

Review of consumer advice

The Treasury has announced a review to try and improve the financial advice consumers have access to. This stems from the government’s current work on improving people’s access to their pensions. The review will take place in autumn 2016 in preparation for Budget 2016.

The review will consider all types of retail financial products including:

  • Insurance
  • Pensions
  • Mortgages
  • Savings 

The review will be led by both the Treasury and the Financial Conduct Authority. Nick Prettejohn will chair an advisory panel of industry and consumer members. Nick Prettejohn is the Chair of Scottish Widows.

Regulator reminds small and micro employers about workplace pension duties

The Pensions Regulator has issued a warning to hundreds of thousands of small and micro employers to check when they must meet new workplace pension duties. The call to action follows research published by the regulator which shows almost two thirds of small and micro employers still do not know the exact date they need to start complying with automatic enrolment laws.

The regulator estimates that, over the next two years, around 1.8 million small and micro employers (those with fewer than 50 employees) will need to act as a result of automatic enrolment duties.

Key findings from the Regulator research are

  • Nine in 10 employers staging between August and November 2015 had commenced preparation for automatic enrolment.
  • Seven in 10 small employers expected to rely on an adviser to provide practical assistance with automatic enrolment.
  • Most (79%) employers staging in 2015 knew their staging date. A lower proportion (29%) of employers staging between January – November 2016 accurately knew their staging date, similar to the 30% of January – April 2017 stagers who knew their staging date.
  • Awareness of automatic enrolment increased among micro employers, while understanding levels increased significantly amongst both small and micro employers.

Scammers targeting over 55s following introduction of pension flexibilities

According to Citizens Advice, which runs the face to face element of Pension Wise, scammers are bombarding people aged 55 and over with phone calls and messages offering them bogus investment opportunities in a bid to get hold of their pensions savings.

Since April, people have had more choice about what to do with defined contribution retirement savings. This has led to opportunistic criminals increasingly trying to persuade savers to move their cash into schemes that do not exist.

Two in five Citizens Advice pensions staff said they had seen people targeted repeatedly by fraudsters, and one in 10 had seen people who had either responded or fallen victim to a con. Half said they thought pension scams were evolving into investment scams, with criminals targeting the cash lump sums people can release from their pots.

Government planning abolition of higher rate relief

Citywire Money reports that the government is planning to use the Autumn Statement to scrap higher rate tax relief for pension contributions in favour of a ‘matching’ system of flat rate relief.

The government has launched a pension consultation on options for reform of pension tax reliefs. But a source said the government is already drawing up plans to axe 40% and 45% tax relief.

It is understood that the Treasury is looking seriously at a ‘single rate’ that would enable the government to match contributions. Working on the basis that a rough average of the current rates of relief offered is 33%, the source said this would enable the Treasury to give £1 of relief for every £2 saved.

State Pension and welfare payments: Greece update

Banks have now reopened in Greece but some restrictions are still in place. According to the latest government update, iInternational payments into Greece are exempt from these restrictions. UK government payments, including State Pension and public service pension payments, will continue to be made into Greek accounts in the usual way.

Contact:

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

Julian Rowe, Head of Technical | Email: julian_rowe@jltgroup.com