Article by Phil
July pension advisory news from Christina Clegg
- The FCA has reported that it has now approved 44 cryptocurrency firms in the UK who have demonstrated that they are able to fully comply with the Money Laundering Regulations.
- 5 million pensioners in the UK paid income in the last financial year. By comparison only 4 million paid taxes back in 2010.
- The number of higher rate taxpayers is also up by 300,000 to 6.3 million. This is a direct result of freezing the tax allowance rates. Don’t expect Labour to make any changes to the tax bands either. It seems taxes are destined to continue to rise.
- June saw the average household savings ratio increase to 11.3%. That’s the amount being saved as a percentage of household income. It was 27% at its peak back in April 2020 during the pandemic when people couldn’t spend their savings. It then fell to 6.6% in June 2022 as people started spending again after lockdown. The latest increase in the savings ratio is a result of concerns about cost-of-living increases.
- Concerns about delays to pension transfers continue to grow. The current delay is now almost 60 days to process the acceptance of a Letter of Authority between an adviser and a pension provider. This is only set to grow as the number of private pensions has grown from 2 million back in 2011 to over 22 million today. Pension advisory firms are concerned that the delays will increase dramatically if and when the pensions dashboard is introduced.
- According to Abrdn over 4 million households are in “serious” financial difficulty and 13% overall faced some form of debt collection action every month.
- Martin Lewis continues to be #1 “celebrity face” being used in online social media scams. The best advice would be to ignore any advertising which includes any kind of celebrity endorsement. Do your own research.
- Emma Reynolds has been appointed as the new pensions Minister.
- The economy grew by 0.4% in May.
- Meanwhile in inflation remained steady at 2%.
- The new labour government has announced a pensions schemes bill as part of their first pieces of legislation. The bill will look at pension advisory work including consolidating small pension pots, improving occupational pension schemes retirement solutions and improving the performance and value of small and default pension schemes.
- The Institute for Fiscal Studies (IFS) has published data which shows that between 2011 and 2022 the average income for pensioners rose by 22%. Over the same period average incomes for working people fell by 3%. So, pensioners became 25% better off than their working counterparts over the period.
- Further data from the IFS showed that increased mortgage rates pushed 320,000 families into poverty in December 2023.
- Crypto firm Coinbase has been fined over £3.5 million by the FCA for failing to have effective controls in place to prevent financial crime.
- The biggest advice firm in the market St James Place continues to struggle. It is now cutting £100 million in costs every year for the next five years saying it will re-invest in better technology. This comes after it provision to pay over £400 million in refunded pension advisory service fees and news that its new investments are down by 45% on the year before. It still has almost 1 million customers, however.
