The Financial Conduct Authority could force pension providers to allow savers that have taken out some 30m policies over the past four decades to exit or switch to a better deal for free over exit fee concerns, the Telegraph has revealed.
The paper has published the revelations following an interview with FCA director of supervision Clive Adamson, who told the paper the regulator is investigating the level of profits made by insurers from funds closed to new business.
Many policies also include a significant exit fee which can cut a policy’s value in half if the saver tries to switch to another provider. These fees could be banned by the FCA if it decides that would be an effective way to ensure better treatment for savers, the paper claims.
The investigation, which is set to be announced in the regulator’s annual report next week, concerns the sales of policies sold via direct sales forces since the 1970s and could cover some 30m sales of pensions, endowments, investment bonds and life insurance.
Mr Adamson told the Telegraph it was wrong that some insurers sent unclear or ‘unengaging’ letters to clients which may not present charges in adequate detail.
Mr Adamson told the paper: “As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten. We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges.”
Webb confirms pension charge cap
Pensions Minister Steve Webb has confirmed pension charges will be capped at 0.75 per cent next year, the Daily Mail reports.
The paper claims that over the next ten years, people who regularly save into a pension will be better off by a combined total of around £200m as a result of more money being kept in their pension pots.
Mr Webb said: “Pension savers have paid too much for too long. It is time to put the saver first. We are going to put charges in a vice, and we will tighten the pressure, year after year.”
The Financial Times reports that the cap will come into effect from April 2015, and was the lowest of several options being considered by the government.
The cap will not include transactional costs and will only apply to the default funds used for auto-enrolled employees.
Six more UBS forex traders suspended
UBS has suspended six foreign exchange traders as the bank’s internal probe into the alleged rigging of currency benchmarks progresses, the Financial Times reports.
Two people close to the situation confirmed to the paper that the bank had suspended three traders in New York, two in Zurich and one in Singapore.
This brings the total number of staff suspended, fired or placed on leave to more than 30 across 11 banks and the Bank of England.
First cases of TB spread to humans by cats confirmed
The first ever recorded instances of cat-to-human transmission of tuberculosis have been confirmed by Public Health England, the Independent reports.
According to the paper, two people have developed TB infections after coming into contact with a domestic cat. Two others picked up the virus from cats but did not develop an infection.
However, PHE said it believed the risk of transmission from cats to humans to be “very low”.
Dr Dilys Morgan, head of the gastrointestinal, emerging and zoonotic diseases department at PHE, said: “It’s important to remember this was a very unusual cluster of TB in domestic cats.”
