December news roundup and local pension adviser highlights of the year

Here’s a roundup of the latest news and highlights of the year from your local pension adviser Christina Clegg:

• The effects of the budget continue to be analysed. AJ Bell estimate that the budget will raise an extra £15 billion in taxes on investors and savers over the next 5 years. The biggest gains will come from ending salary sacrifice which you should speak to your pension adviser about and the increase in dividend taxes by 2%.
• Of course, the salary sacrifice changes won’t affect public sector pensions. They will, however, create further disparity between private sector pensions and public sector pensions paid for by the tax payer. Evelyn Partners estimate that the government will save £4.7 billion as a result. Money that private sector savers can no longer put into their pensions. It’s becoming more of us and them all the time.
• Especially when you consider that 3.3 million people will be disadvantaged as a result of the changes. Despite government spin about it being a tax loophole for the rich. If you are affected speak to your local pension adviser.
• In the run up to the budget, Hargreaves Lansdown reported that ISA contributions were up 90% on the year before and SIPP contributions up 7%.
• Overall, £4.2 billion was invested into ISAs in October.
• Back in January a Bank of England survey of businesses found that 54% said they would have to raise their prices, 61% said they would make lower profits, 53% expected to employ fewer people and 39% said they would pay lower wages – just about what seems to have happened this year!
• The Advertising Standards Authority (ASA) cracked down on two adverts which promoted art as investments. On both occasions the adverts weren’t clear that growth could be variable.
• In February it was announced that from 1^st April the Financial Ombudsman Service would introduce a £250 fee for Claims Companies to submit a claim for assessment. £175 would be refunded if the claim is successful. It would continue to be free for members of the public to submit a claim direct. As we’ve seen, this has reduced the number of claims by over 75%.
• In the Spring Statement the Office for Budget Responsibility (OBR) downgraded this year’s growth forecast by 50%, from 2% down to 1%. Things are likely to get worse before they get better – as we’ve seen they have got worse.
• Back in April the Advice Show reported that interest in Environmental, Sustainable and Governance (ESG) investment funds had dropped sharply in recent years. This might be because overall they have performed less well than other funds invested in oil, gas and other non-environmental industry. Perhaps suggesting that environmental concerns don’t trump financial performance.
• In July the FCA said it had cracked down on fin influencers promoting financial products on social media. It said that three people had been arrested, seven others have had letters warning them to stop what they are doing and a further 50 warnings have been issued. This theme has continued throughout the year.
• In September ahead of the budget HMRC issued a warning to local pension adviser to advise clients who were thinking of taking their tax-free lump sums ahead of the budget. They have said that withdrawals cannot be reversed once they have been requested and processed. Some pension providers offer 30 days cooling off period, but HMRC have said that this cannot apply to tax free cash withdrawals. It seems this is to prevent people trying to hedge their bets ahead of the budget.
• Some good news for investors. The FTSE 100 index had its best year since 2009. Returns were 22.8% this year.
• According to FT Adviser, mortgage lenders have started to take a more relaxed view on lending limits. They found that half of the biggest mortgage lenders are now providing mortgages over 4.5 income to borrowers and the number of these high loan to income mortgages are now over the old 15% of overall lending limits. Good news for home buyers, especially first-time buyers who need all the help they can get.
• 2,000 people started their search for their potential lost pensions after responding to the National Pension Tracing Day campaign on the 26^{th of} Not quite as many as they had hoped, with an estimated 3 million unclaimed pensions worth over £30 billion out there. The place to start is on the .Gov website. Or see if your local pension adviser can help.
• Bad news for the government again. GDP fell by 0.1% in October. Quilter blames the budget for damaging both consumer and business confidence. It makes a mockery of the Chancellors long term growth forecasts which show everything being rosy in 4/5 years’ time. The reality is very different.
• But better news on the inflation front which held at 3.2% in November.
• On the back of this the Bank of England cut base rate to 3.75%.
• HMRC is warning people to be on their guard for Self-Assessment scams in the run up to the Self-Assessment deadline on 31^st So far, they have received almost 5,000 calls about scams this year. Many involve text messages and calls threatening legal action. Please be wary.

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If you need advice from a local pension adviser then why not contact Christina today. She offers a free initial meeting to discuss your requirements and explain how our service works. You are under no obligation to use us after that if you don’t want to and we won’t pester you.

So why not call us today on 01282 614444 or e mail us enquiries@ccfps.co.uk or use our contact form online.