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Financial Adviser Letters

Financial Adviser Letters

This week...

FCA stopping effective use of pension freedoms

Regarding your article ‘Steelworker blames FCA for killing DB transfer advice’ (May 29). The steelworker is correct.

As usual the Financial Conduct Authority have got it wrong. They are effectively stopping clients from using pension freedoms.

We all know the benefits of defined benefit schemes – income for life.

But how many clients use up the whole value of the funds?

It usually takes about 30 years to get the full income benefit based on the transfer valuation.

So a client would have to live to 97 if retiring at 67 to get full benefit.

The average life expectancy in the UK is about 81.

So who benefits from this – insurance companies, or the DB schemes themselves?

A lot of people want to pass on their pension funds to family when they die, which is not possible in most DB cases, other than about 50 per cent pension (usually) to the spouse.

Between the FCA and professional indemnity insurers, clients will no longer be able to access pension freedoms as they should be.

Also, clients will not pay high fees to not get what they actually want.

Would you?

Colin Tanner

Tanner Financial Advice

 

Compromise on SPA

I feel very strongly about the unfair treatment of women born in the 1950s, for the simple reason that throughout their working lives this generation never had the same equality as men.

Yet now, years later, the goal posts are moved to bring them equal to men on their retirement age. How can this be either fair or just?

If men and women are to be classed as equal at retirement age then surely women must have had the same finances as men when doing the same jobs.  

This would have allowed them to plan ahead for their retirement on an equal footing as men had throughout their working lives.

The women hardest hit are those born in the 1950s. Many of them have 30-plus years paid up national insurance contributions.

They have now had their pension ages increased. 

Women born in these years have also been vulnerable in this pandemic.

It is worth considering meeting women halfway, so that those women born in the 1950s receive their state pension age at 63. 

This would at least be a compromise, especially as there are now records that show the higher increased number of deaths in the elderly.

Many of these women could not afford to stock up on household essentials and were forced to go out to food shop more often as a result, therefore increasing the chance of them contracting coronavirus.

Given all the facts, is it not time that common sense prevails and a compromise on womens’ state pension age is reached?