Since 2012, 10 million eligible workers have been automatically signed up to workplace pensions. From April, their contribution will rise from 3% of their salary to 5%.
The FCA is consulting on new measures to stop consumers losing out on pension income when they access their pension freedoms. The regulator has previously expressed concern about consumers moving into drawdown and holding their funds in investments that will not meet their needs. It wants firms to offer ready-made investment solutions, known as "investment pathways", to the estimated 100,000 customers that enter drawdown without taking advice each year. Smaller drawdown providers will be able to refer investors to another provider or the Single Financial Guidance Body’s drawdown comparator tool. The FCA says it expects firms to "challenge themselves on the level of charges they impose on investment pathways" and could consider imposing a cap.
£1.9 billion was withdrawn from pension schemes under flexible pension rules in Q4 2018, according to the latest figures from HMRC. With £7.8 billion withdrawn from 2.3 million payments through the year to date, 2018 has exceeded 2017 by £1.3 billion in withdrawals and 614,000 payments. These are record numbers but that's only to be expected as more people reach the age they can take a flexible payment and awareness of flexible options increases. Our big problem is that we don't have any 'what does good look like' benchmarks to compare these figures to, plus they are only a partial snapshot. “Billions of kinds of tax free cash payments are not included in these figures nor are many other pension withdrawals, such as small pot withdrawals or purchases of guaranteed income for life solutions. Nor do the figures tell us how many individuals have withdrawn money, how much they have withdrawn or how often.
Changes to pension credit could leave some couples £7,000 a year worse off, Age UK has warned. Earlier this week, the Government announced changes to benefits for mixed-age couples which will be introduced from May 15 2019. Age UK said the change could leave "some of the poorest pensioners paying a hefty price for having a younger partner". The charity said the changes effectively mean some couples may find themselves in the "absurd position" of being financially better off if they split up and live apart. It said this is because, once the change is implemented, the pensioner partner would, in many cases, be eligible for more money from their pension credit than they and their partner would get together from Universal Credit .
Responding to last night's vote on the EU Withdrawal Agreement, the chief executive of UK Finance warned that "time is running out to avoid a chaotic ‘no-deal’ Brexit that would be catastrophic for the UK economy". The Bank of England governor today said markets believe Brexit could be softened or even cancelled after Theresa May's catastrophic defeat last night.