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Financial Adviser Letters

Financial Adviser Letters

Regulator knew about PPI

Philip Sinel is correct to say that the regulators knew about payment protection insurance.

Back in 2003 there was a bank that offered loans at two rates: 7.9 per cent a year with a PPI policy and 17.9 per cent without.

When I suggested to a client that he take out the PPI policy together with the loan and then cancel the PPI policy a few days later the bank went into overdrive and tried to increase the loan rate to 17.9 per cent.

However, they had to admit eventually that PPI was not a requirement of the loan and agreed to retain the loan interest rate at 7.9 per cent without the PPI policy.

At the time I did ring the then Financial Services Authority about this matter, but was told that PPI was not within the regulator’s remit.

Linda Hulls

Cameron Trinity

 

No incentive

Regarding the story about the fraudster who has been told to pay victims 10 per cent of £3m profit (November 27): Just over £116,000 a year to stay in jail for an additional two and a half years, being fed and watered, does not sound too bad to me. Hardly an incentive to repay, is it?

Julian Lowe

Perspective Managing Wealth

 

NHS same as anyone else

I read the pension and hidden tax problems with great interest as I have a client falling into this trap.

I have had something on my mind for days and have been waiting for an accountancy commentator to comment.   

It is about the NHS paying consultants’ tax.

Has the NHS not heard of benefits in kind?

There is no difference between paying someone’s children’s school fees and paying their tax. What the NHS has forgotten is that paying their tax will cause them even greater problems because by adding a benefit in kind to their salary you will automatically drastically increase their tax because you have also drastically increased their salary.

Although one cannot deny that consultants have an important role in health care, what makes them any different from anyone else, from a tax viewpoint?

Name and address supplied

 

Annuity v drawdown

I have seen Neil Liversidge’s letter concerning his antipathy to annuities. I must trenchantly disagree with him.

As a chartered member of the Chartered Institute for Securities & Investment, I think I know what I am talking about and this is not just theory as I have taken my pension benefits and purchased a joint life annuity.

I am not surprised that Mr Liversidge, in common with the majority of advisers, fund managers, providers and platforms are staunch advocates of drawdown. 

After all it is in their financial interests. If an annuity is purchased the funds, in effect, disappear. The adviser can only make a one off (fairly modest) charge. With drawdown he has an unlimited income stream for ongoing management and advice.