Tag Archives: pensions

Business, FInance, Pensions

Employers must evaluate Excepted Group Life Assurance arrangements in the lead up to the abolition of the LTA, says Quantum

Quantum Advisory, the leading independent financial services consultancy today urged employers to reevaluate Excepted Group Life Assurance arrangements in the lead up to the abolition of the Lifetime Allowance (LTA) on 6 April, voicing concern that many do not have a full understanding of the potential tax charges going forward.

Graham Yearsley, Principal Consultant at Quantum said: “Many employers have implemented Excepted Group Life Assurance arrangements for their employees, these group life schemes are trust based and provide for a lump sum to be payable in the event of death in service.  As they are not registered pension schemes, they have become very popular with high earning employees as they are not tested against the current LTA.

“Whilst lump sum death in service benefits will no longer be tested against the LTA, members of a Registered pension scheme from 6 April 2024 will be tested against the new Lump Sum & Death Benefits Allowance (LSDBA). As the LSDBA will be subject to the deduction of relevant benefit crystallisation events, of which an authorised lump sum death benefit is one such event, any excess death in service lump sum above the new LSDBA will be taxed at the recipient’s marginal tax rate which could reach 45%. This will make a big difference to both employer and employee.”

Yearsley added: “There is clearly still a need for Excepted Group Life Assurance and it’s very concerning that employers may not understand the potential tax charges associated before making a decision on who should continue to be insured in that arrangement. This could lead to significant issues going forward. Employers must evaluate all potential tax charges soon and decide if they are still fit for purpose as an option for their employees.”

For more information on Quantum Advisory visit www.quantumadvisory.co.uk

Events, FInance, HR, Pensions, Wales

Seminar sets out pensions landscape for 2024

Finance, HR and pension professionals came together on leap day (29 February) to hear exclusive industry insights at Quantum Advisory’s latest breakfast seminar at the Celtic Manor Twenty Ten Clubhouse.

Speakers including Dan Redwood, Chris Heirene and Leah Summers from Quantum Advisory, the leading independent financial services consultancy, discussed investment, the progress of the Pensions Dashboard and upcoming changes in the world of pensions and employee benefits.

Dan Redwood, senior investment consultant and actuary, opened the event with an overview of how investment markets, gilt yields, and UK and global economies have been performing. With a technical recession in the UK in Q4 and economic stagnation since 2022, Dan revealed the impact of high inflation and the Bank of England’s base rate on defined benefit pension schemes.

Dan said: “The era of ultra-low interest rates is over. This has a significant impact on gilt yields, which have experienced volatility in recent quarters, and pension schemes; both of which require stability.

“Inflation is falling and interest rate cuts are expected this year, although not to previous ultra-low levels, so the environment is improving from a macroeconomic perspective and a soft landing is likely. However, there are a number of external factors that could still throw us off course such as geopolitical tensions around the world and disruption to supply chains.”

Chris Heirene, partner and head of technology, updated attendees on the progress of the long awaited Pensions Dashboard.

The Pensions Dashboard, delivered as a website and app, will allow individuals to check their pensions information online in one place. It aims to help savers understand their current financial standing and support better planning for retirement. Originally the dashboard availability point, the moment at which dashboards will be publicly accessible, was planned for April 2024 but has since been delayed.

Chris said: “With a revised timeline now in place, we will all be waiting a little longer for the Pensions Dashboard. While we don’t have a specific date for the dashboard availability point just yet, we anticipate this to be between May 2025 and July 2026. What we do know is that the Pensions Dashboard will be up and running by October 2026 as this has been legislated.”

Leah Summers, consultant, concluded the breakfast seminar by highlighting a number of key upcoming changes including the General Code of Practice, the abolition of the Lifetime Allowance and the allowances replacing it, and assumption changes in defined contribution pension scheme benefit statements.

Leah said: “These three changes are coming into effect very soon. The measures are being introduced to simplify the code, tax allowances and statements for trustees, schemes and members respectively.”

Stuart Price, partner and actuary at the firm, said: “It was brilliant to see so many delegates, including new and familiar faces, spend the extra day in February with us at our pensions and investment breakfast seminar. A diverse range of subjects were covered throughout the morning, providing delegates with a thorough understanding of the current pensions and economic landscape and the changes coming down the track.”

For further information and to keep up to date with Quantum’s latest events, visit https://quantumadvisory.co.uk/.

Accountancy, Business, Business News

Quantum Advisory secure £9m full scheme buy-in for Birmingham Chamber of Commerce with Just Group

Quantum Advisory, the leading independent financial services consultancy, has brokered a £9m full scheme buy-in with Just Group for the Birmingham Chamber of Commerce Pension Fund. The transaction provides improved benefit security to around 100 pensioners and 40 deferred members and opens a new chapter for the sponsoring employer, Birmingham Chamber of Commerce & Industry, who can now concentrate their resource on commercial activities for the benefit of businesses in the surrounding area.

After much work and due diligence, Trustee Corporation Limited (acting as Sole Trustee) signed terms with Just Group towards the end of last year, a significant step towards full scheme buy-out where all members’ benefits will be secured with, and paid by, Just Group for the lifetime of the Fund.

The lead transaction adviser, investment adviser and Scheme Actuary are Quantum Advisory and the Trustee legal adviser for the buy-out project is Gateley. The longstanding Trustee of the Fund is Trustee Corporation Limited, represented by Vivien Cockerill.

Adam Cottrell, lead transaction advisor at Quantum Advisory, said: “To complete a £9m transaction so seamlessly at an extremely busy time for the market was very satisfying. Knowing how this enhanced level of pension security will benefit members over the long term, at a time when everyone’s finances are so stretched, also makes this a particularly rewarding end to a successful project. The Trustee and the Chamber put their trust in us to make the right moves, at speed, at key stages of the transaction, something which is so often critical in getting this size of deal over the line.”

Joanne Eynon, partner and scheme actuary at Quantum Advisory, said: “We have worked diligently with the Trustee and Chamber since 2010 and so it was very fulfilling for us to see them achieve their long-term strategic objective as planned, providing additional security for Fund members and a new chapter for the Chamber. We are very proud to have helped them reach this key milestone on their journey to buy-out.”

Vivien Cockerill, trustee director at Trustee Corporation Limited, said: “The Chamber of Commerce and the trustees, including Trustee Corporation Limited, identified buy-out as their long-term aim many years ago. Trustee Corporation Limited moved to become the sole trustee more recently and the team is delighted to have achieved the important step of a full buy-in significantly more quickly than expected. The careful planning and good teamwork with the Chamber and the advisers in implementation have worked well.”

Helen Bates, chief financial officer at Birmingham Chamber of Commerce & Industry, said: “Birmingham Chamber of Commerce & Industry is pleased to secure its members’ benefits following the sale of its premises in 2020 and significant investment in the fund. The Chamber has worked closely with the trustee of the scheme Trustee Corporation Limited and scheme actuary Quantum Advisory to secure the future of the fund, and we can now focus on our mission to connect, support and grow businesses in Greater Birmingham.”

 

Rosie Mills, senior business development analyst, Just Group, said: “We completed this transaction in such a short timeframe, and in a particularly busy market – which illustrates that there’s a vibrant bulk annuity market for schemes of all sizes. We’re very pleased to have helped secure the future benefits of 140 members and assist the Trustee on its journey towards buy-out, while freeing the Birmingham Chamber of Commerce and Industry to focus their resources on commercial activity in their local area.”

 

Finance and Banking, News

Financial advice firm offers free pensions seminars for teachers

A TEAM of experts is offering their expertise for free to help keyworkers.

Independent financial advice firm Sterling and Law Hampshire is running seminars within schools and colleges across the south coast, offering advice and guidance to staff around pensions.

Pensions expert George Rashbrook is delivering the talks, which will help teaching staff and lecturers gain a better understanding of the Teacher’s Pension Scheme.

The seminars will be interactive and easy-to-understand, covering topics such as how benefits are built up, what their benefits in retirement might look like and how their families might also benefit from the scheme.  The aim is to remove jargon and explain the technicalities, helping the teachers to understand in real terms how to ensure a financially secure future.

On March 17 they are hosting a session within Fareham College that is open to any teacher at any school which has not signed up to have its own seminar delivered, to allow teachers from across the region to find out more about their pensions.

George decided to introduce the initiative to give something back to people working in the education sector, which has faced many challenges throughout the last two years, with often little recognition.

He said: ‘I’ve seen first-hand the pressure that education workers are under with my wife being in the profession, and they aren’t always as widely acknowledged as other key workers. Covid certainly added extra strains on top of this.’

He has found that during his 17 years’ experience, a large number of people working within the education sector aren’t as knowledgeable about their pension scheme as they would like to be.

‘I’ve worked with lots of teachers in the past, especially those who are approaching retirement, and have found that many don’t know where to turn for credible guidance about their pension benefits and their wider retirement plans. They tend to be aware that they are members of a truly excellent scheme but that brings with it a vast degree of complexity.

‘This is where we come in, as we want to ensure that their hard work is well and truly rewarded, whether they’re a teacher just starting out in their career and starting to save or someone with years of experience who is thinking about retirement.’

George and his team have delivered talks across the Hampshire area as well as further afield in Surrey and Dorset and are open to contact from other schools who may be interested in taking advantage of this free resource either in person or virtually.

On March 17 they are hosting a session within Fareham College that is open to any teacher at any school which has not signed up to have its own seminar delivered.

Hayden Taylor, CEO of Unloc and education director at Shaping Portsmouth believes the initiative will benefit teachers.

He said: ‘Teachers are often under incredible pressure in the workplace, dealing with a significant workload, and a wealth of information from all angles that they need to absorb, process and share with their students. With so much going on, and playing catch-up with the curriculum post-COVID, it’s easy to push things such as pensions and future retirement to the side-lines and focus on the now. The Covid situation over the past two years has only exacerbated this and pushed retirement to the back of a lot of education professional’s minds.

‘This series of talks from Sterling & Law Hampshire will provide a really accessible and easy way for school and college staff to get their heads around their pension and cut through the jargon to get to the core issues of their future retirement. Working within schools and colleges ourselves we recognise just how beneficial and effective these kinds of sessions are, and I encourage anyone working in this field to come along and join in. It really will help.’

For more information email George.rashbrook@sterlingandlaw.com

Finance and Banking, Financial Wellbeing, News, Pensions

No plan for the future: Most Brits have no clue about pension payments and two in five can’t even find their savings

The working population of Britain is woefully underprepared for retirement, with the majority unaware of what payments they’re entitled to or how to access their funds, according to new research.

The money.co.uk study investigated Brits’ understanding of pensions, finding that four in five don’t know what weekly payments they’ll receive during retirement, while a further 13% didn’t realise they were entitled to anything at all.

Perhaps more alarmingly, almost a quarter of respondents (24%) admitted they’d struggle to locate and access their pension pots, with another 18% stating they had “no idea” whatsoever.

The study also asked how Brits were planning to finance their future, aside from working one regular job, and traditional methods such as making use of savings accounts (38%) and investing in stocks and shares (15%) were most popular.

But as many as one in 10 said they plan to – or already do – work a second job to help in later life.

 

How Brits aim to make money to help plan for the future, outside of a main job:

 

Method Percentage
Putting money in a savings account 38.4%
Investing in stocks/shares 15.2%
Investing in property 11.5%
Awaiting an inheritance 10.3%
Second job 10.1%
Premium bonds 9.3%
Foreign exchange trading 2.7%

 

But, with the ever-increasing cost of living putting a strain on the younger generation, it seems as though the 16-24-year-olds and 25-34-year-olds are putting away a higher proportion of their earnings for the future than those aged 35-54. With the over-55s edging closer to retirement age, this proportion then jumps back up again as they approach the end of their careers.

 

How pension contributions vary with age:

 

Age range Average proportion of salary put into pension pots each month
16-24 8.1%
25-34 7.2%
35-44 6.4%
45-54 6.9%
55+ 8.2%

 

Salman Haqqi, Personal Finance Editor at money.co.uk said: “A pension is a vitally important tool for helping provide a stable income in later life. Once people retire, this often forms the majority of their income, so the nine in 10 people who were unsure about their future may want to re-familiarise themselves with the systems, as well as the location of their pension pots and log in details, to avoid any potential issues that could arise in the future.

“The basic state pension payment is £137.60 per week, with this amount rising to £179.60 for younger workers, as outlined on the government’s website. However, 25% of Brits are missing out on potential further payments in the future as they have opted out from additional personal or workplace pensions. It is certainly worth assessing your options to provide the right balance between having enough disposable income now, and ensuring financial security in the future.”

 

FInance, News, Pensions

How to Take Control of Retirement Planning in 2021 and Beyond

What does your dream retirement look like? What kind of lifestyle do you imagine? Maybe you’re planning to travel more, or perhaps you’re thinking of going back to school. Maybe that passion for photography could become a new business, or perhaps you’re simply looking forward to taking a break and enjoy spending more precious time with those you love.

Whether retirement will see you bungee jumping in South Africa, or trampoline jumping with the grandkids, Steve Pennington, Head of Wealth Planning at Private and Commercial Bank Arbuthnot Latham discusses how planning your retirement now will help bring those dreams the chance of becoming reality.

There are so many “what if’s” and unknowns to take into consideration that retirement planning can feel daunting. What kind of retirement lifestyle can you actually expect? What if I want to (or need) retire early? What if I or my partner needs care in older age? What if my children or grandchildren need financial support? What if I want to buy a Jaguar E Type? What if my investments fall?

2020 has only added to these concerns, so what can you do to feel more in control?

Understanding what you want to achieve is the first step. Is the key goal to maintain your lifestyle in retirement, or do you have different priorities? By looking at your cash flow today and modelling a range of anticipated cash flow scenarios in retirement, you can immediately visualise your future financial position. Through building in key personal milestones such as a change in lifestyle, travel, downsizing, buying that car, or selling a business, you can build a clearer of picture of what you’ll need and when.

More than 10 years until retirement

Look at your current later life provisions. How do you intend to use your non pension assets in retirement? How and when do you actually intend to use your pensions? Are you planning to stop working before you’re eligible to access your formal pensions? Do you have a personal or company pension? If you’ve worked for a number of companies, you may have several. Have you considered consolidating your pension arrangements? Have you checked how your retirement funds are performing, and if your circumstances and ambitions have changed since you last reviewed them?

If you are earning more than you spend, it’s also worth thinking about what you’re doing with your excess income. Inflation erodes the value of savings over time, meaning your purchasing power in the future is reduced. Of course, everyone needs cash reserves, but could you invest more now, using tax advantages, so that your retirement ambition has a more certain outcome?

Less than 10 years until retirement

If you’re approaching retirement, you probably already have a rough idea of your retirement plan. It’s also likely that you’ve experienced some investment turmoil over the years which may have caused unease and uncertainty. When you have financial plans in place it can be tempting to just stick with your current investment arrangements, whether they are performing or not, or perhaps you have been thinking about making some changes but need guidance and advice. Professional advice at this time can help you feel in control of your finances and your future.

If you’re feeling unsure about the state of your investments, or how your finances are arranged, it’s important to find an adviser who can review your circumstances and discuss suitable options in order to address your objectives. As you near retirement, it’s even more important to review your appetite for risk, capacity for loss and complete a financial health check to assess whether you are on track. Often Investors are happier to take fewer risks as retirement approaches, but this is not always the best course of action. Consider that pensions may need to provide you with income for the rest of your life.

Already retired

If you’re already retired, you’ll already be using your assets to fund your lifestyle. It’s certainly worth reviewing how you are using your assets to provide income. At this stage of life, many people’s financial goals change from investing for growth to investing for income. However, as people live longer, retirement is often broken into different stages, allowing you more control over how you structure your finances and access your wealth at a future date to deliver different benefits at different times.

To find out if your retirement dream is achievable take this short quiz here:
https://www.arbuthnotlatham.co.uk/insights/retirement-quiz

Contract Wins, Creative News, Marketing, PR and SEO, News

NOW: PENSIONS hires AML Group

AML Group, the London-based creative agency, has been appointed by NOW: Pensions – the leading UK pension provider.

Part of the Cardano Group, NOW: Pensions is a business on a mission to change the pensions landscape in the UK – highlighting inequalities to provide a fairer system for everyone, ensuring all pension savers get the retirement they deserve.

On the decision to appoint AML Group a Now Pensions spokesperson said:

“AML demonstrated a thorough understanding of who we are as a business – our ethos, our purpose and what we stand for. They also bring a wealth of experience that made them the obvious choice.”

Commenting on the win Tim Lloyd, MD AML Group says: “We are thrilled to have been chosen by Now Pensions. Whilst the climate continues to challenge and become ever more complex, we remain committed to helping our clients tell the stories that matter – remaining steadfast in our mission to deliver simple ideas for a complicated world.”

Creative News, Engagement, News, Pensions

Aegon personalised pension video summaries scoop award for innovation

Aegon’s unique video summaries were recently recognised in this year’s Financial Services Forum Product and Service Innovation Awards, securing the company the top spot in the Marketing and Communication category.

The animated video pension summaries have transformed the average pension communication for members of Aegon’s workplace pensions, featuring real time pension information such as fund values and contributions levels in a 3 minute video summary which provide members with a timely picture of their retirement savings position.

An example video can be found here: http://www.aegon.co.uk/content/dam/ukpaw/hidden/Workplace/video-summary-30-45.mp4

Members can access the videos online at any time – but videos are also delivered by email ahead of the paper statement that is linked to a member’s renewal date. Developed using a matrix of data and gamification techniques, the videos also feature the latest behavioural science insights to shape the design, language, sounds and features, ensuring members are fully engaged.

Videos contain 10 sections that are completely personal to the member and references lifestyle targets rather than setting retirement goals. These include age, value and investment status, with more than 3 million unique script and scene variations.

Digital pension summaries are just one of many ways in which Aegon is adapting its proposition and communication to meet and exceed customer expectations.

This most recent award follows recognition in a report by NextWealth that showed Aegon as one of the leading providers in the adoption of digital processes and the use of esignatures.

The analysis by NextWealth looked at 85 processes across 20 platforms to benchmark adoption of digital processes and the use of esignatures.

Mark Till, Managing Director, Digital Solutions at Aegon, comments:

“Digital communications are creating opportunities to engage people in ways few would have thought possible just a few years ago. Through clever use of customer data, we have been able to personalise communications in a way that really cuts through and which spells out how people can make the most of their finances.

“Video summaries are a great example of the type of innovation we are deploying across our business seeking to work in partnership with employers and advisers to transform the customer experience. We are at the beginning of this journey and have a number of exciting developments planned which we believe will transform the financial wellbeing of the UK.