Pension Advice Service news from April 2025

Pension Advice Service news from April 2025:

• According to Intelliflo 90% of people using a pension advice service are over 40 years old. Only 5% are under 30. Men are also more likely to pay for advice as are married couples.
• It seems like the same percentage of people are happy to be advised digitally as those who want to see an adviser face to face.
• An increasing number of people are requiring a Pension Advice Service as the number of pensioners paying tax has risen by 6% to over 7 million. With personal tax allowances frozen it won’t be long until most pensioners find themselves paying tax.
• The government has said that it will be undertaking a review of the Financial Ombudsman Service (FOS) to make sure it is doing what it is set up to do. That is to act as an independent body looking at financial disputes. There are concerns that it might have been stepping over the mark and acting beyond its remit. We certainly think so.
• It is now 10 years since the pension freedoms legislation was brought in allowing people greater flexibility to access their pensions on retirement. Standard Life have found that 85% of people who used a pension advice service to access their pensions since 2015 said that they had benefitted from the changes.
• The Financial Service Compensation Scheme (FSCS) deposit protection limit is set to be increased from £85,000 to £110,000 by the end of the year. This will be the first increase since 2017.
• The Advertising Standards Authority (ASA) has ruled against an advert suggesting that a car buying scheme would create returns for customers over the next three years. The ASA found that the scheme was a financial promotion and therefore subject to all the necessary advertising rules about disclosure. The ads will no longer be run.
• Make sure you pay your tax on time. HMRC has just announced that the interest charged on late payments has risen to 8.5%. This raised over £150 million last year, and the Chancellor has promised to invest more in chasing down unpaid taxes going forward.
• The state pension increased by 4.1% from April.
• Barclays have announced that they will accept zero deposit mortgages for Right to Buy schemes. They will accept the RTB discount in lieu of a deposit. Good news if you have a RTB option on your property.
• GDP increased by 0.5% in February bucking the recent trend of low growth.
• According to the Resolution Foundation, the average family will be £400 a year worse off this year. That’s due to a combination of frozen tax thresholds meaning workers will pay more of their salary in tax alongside increases in utility bills and council tax.
• HMRC have said that their forecasts show that 18 million people will be paying basic rate income tax by 2029 as a result of the freeze on tax allowances. 8 million of these new taxpayers will be over the age of 60.
• Inflation fell to 2.6% in March.
• An extra £800 million in Inheritance Tax (IHT) was paid in the last financial year to March 2025. In total £8.2 billion in IHT was collected. A good pension advice service should always include advice on IHT planning as well.
• The Department of Work and Pensions (DWP) has admitted that the amount due in underpaid pensions is now close to £1 billion. This is mainly due to women and stretches back years. The analysis started back in 2021. So far, no money has been paid out. This is a truly shocking situation. The FT Adviser has reported on the matter in more detail if you would like to find out more. It may affect you.
• In other news about our failing public services. Over 33% of people reported having to cash in their savings including investments in order to finance their living expenses because of extended delays in the Probate system. Sadly, we have clients caught in the probate system.
• 30% of people still don’t have a Will in place which makes the probate process much more difficult.
• In a shocking report by Handelsbanken Wealth & Asset Management. They found that over a third of small business owners were thinking of quitting the UK as a result of the governments tax increases.
• The number of complaints reported to the Financial Conduct Authority (FCA) about investments fell by nearly 5% last year. Down to just under 100,000 complaints. Compare that to 1.6 million complaints about banking and credit cards and a further 1.5 million about insurance and protection. Pension complaints were also low at around 180,000.