News

Personal accounts 'must compliment existing pensions'
Over-55s: Sky high confidence but not enough pension savings
'Pension stretched by record inflation'
Pensions-inflation link dubbed "inappropriate"
Sipp set-up fees drop 13%
'Not enough tax incentives for pensions'



Age Expectancy

The Pension Protection Fund stated in its annual report that the fund had liabilities of £5bn but only had assets of £4.4bn leaving a £600m shortfall in March 2007. Approximately £241m comes from the fund increasing its current future life expectancy predictions.

The change is only an extra 4% to 5% to the liabilities but could affect the way other pension schemes are asked to present liabilities to the Pension Protection Fund. This could increase levies up to 20%.

It is not thought this will affect the numbers of members because they will only be interested in how much they will be getting and to make sure their pensions are safe.

Norwich Union on Corporate Pensions

Norwich Union has said that its pension business has dropped by approximately 17%. Figures showed that individual pensions fell from 3.2bn in the first nine months of 2006 to £2.7bn in the same months in 2007.

Corporate pensions rose by 2% and Norwich Union consider this the key area for expansion. With-profit sales rose by 50% from £575m to £865m but protection sales fell by 15%.

Changes to the capital gains tax could affect about 5% of Norwich Union business but a spokesman did not consider it a big problem as they sell other products not just bonds. Also, he added, if people wanted to get out of bonds they may possibly move to another of their products so they would not lose custom.

Sipp Probe

The Financial Standards Authority’s review on Self Investing Personal Pensions is to focus on the transfer market.

It is felt that this is a warning that they are satisfied about some of its findings. Detailed information has been asked for especially on transfers into Self Investing Personal Pensions and commissions.

Advisers have been told to take note of the Financial Standards Authority newsletter on Self Investing Personal Pensions and state why the recommend this type of pension.

The results of the review will probably been announced towards the middle of next year. It is considered that if proper checks were not made but that the Financial Standards Authority will thoroughly look into this matter.

Directgov

Directgov have set up a pension tracing services which is free to those who believe they are losing out on pension entitlements that are worth thousand of pounds.

Research showed that over half of adults have no idea how much is in their pension schemes because they have not kept a track on them and this worsens the amount of times a persons changes jobs.

People have not kept track of their pensions because they do not consider them to be worth much, the research found.

The tracing service with be able to access 200,000 occupational and personal pension schemes.

Saving for the future is important but people do not know how much they have saved in their pension schemes and this will give people the chance to trace lost pensions and therefore will allow them to plan for the future.

Employees 'kept in the dark' about pensions

Many employees are being kept in the dark about the performance of their pensions, it has been claimed.

Research from Barclays Financial Planning concluded that only 52 per cent of employers say that they regularly update staff on how their pension is doing, with 67 per cent of companies informing staff of the benefit of their scheme through their contract or offer letter at the start of their employment.

The bank said that 25 per cent of small to medium-sized employers (SMEs) do not regularly review the performance of the investments in which they have placed staff pensions.

This is despite 83 per cent of SMEs saying that pensions are a responsibility that companies should take in order to secure their employees' future.

"By improving monitoring and communication, staff would have a much better idea of where they stood and this might encourage them to contribute to the pension themselves, to help secure a comfortable retirement," commented Stephen Ingledew, director of Barclays Financial Planning.

Around 22 per cent of Britons view saving for a pension as one of their top financial priorities, according to Alliance Trust research, rising to 27 per cent among 30 to 50-year-olds.

Landlord Mortgages comments ‘whether you are a Mortgage Adviser or Financial Adviser you role is the same, that is to say you need to be advising. All too often advisers fail to keep in regular contact with their clients, we have learnt at Landlord Mortgages that regular contact is a must if you are to keep your client on track.’

Babyboomers enjoy pension privileges

People who are currently in their 50s are likely to be the last generation of "retire-easies", a new report claims.

The Scottish Widows research found that many over-50s feel that they are comparatively lucky when it comes to pension saving, with 58 per cent thinking that it will be difficult for their adult children to build up a pension.

Around 60 per cent feel their children will have problems building up any savings at all, while 53 per cent think that it was more difficult for their parents to save for a pension.

Younger people echoed the view of over-50s as a privileged generation when it comes to pensions, with 50 per cent of 20 to 30-somethings feeling it was easier for their parents to save for retirement.

Over-50s are likely to be benefiting from final salary pension schemes and the property boom, meaning more money to save for a pension or nest egg, Scottish Widows said.

Economist professor Merlin Stone commented: "In general, the conclusion seems to be that babyboomers have saved enough to fund their retirement, but the following generations have been less successful in this respect."

HSBC identified women, and stay-at-home mums in particular, as another group who have been less successful in saving for pensions, with six in ten females saying they are not contributing to a pension scheme.

LettingAgent.com comments ‘the young have always been reluctant to think about retirement and until they buy their own home pensions become secondary. The first step of buying your own home seems to be delayed with many young deciding to rent for longer.’

© See Terms and Conditions