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Pension trouble and footballers go to court: week in news

Pension trouble and footballers go to court: week in news

January seems to have kicked off with a lot of court action.

Here is everything you need to know about the week in news.

1) Look at the state of it

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This week research from the Pensions Policy Institute revealed the poorest pensioners are relying on the state pension for three quarters of their income.

Even pensioners in the middle level of the income distribution get more than half their income –  53 per cent –from the state pension, increasing to 61 per cent when state benefits are included. 

This was not the only time the state pension was in the news this week, because a few days later we learnt that state pension forecasts can be showing more income than the individual will receive, since it will include contracted out savings even though if these are cashed out by the individual.

Meanwhile the Government Actuary's Department revealed the national insurance fund – which pays the state pension and other social benefits – will run out of money around 2032.

This means National Insurance contributions will need to increase by 5 per cent to sustain the state pension, which is responsible for more than 90 per cent of the expenditure of the fund.

2) Courting controversy

The long-running saga of the demise of BHS continues to, well, run.

The department store's former owner, Dominic Chappell, found himself in court this week accused of neglecting or refusing to provide information and documents to The Pensions Regulator.

He bought the chain from billionaire Sir Philip Green for just £1 in 2015 but the company subsequently crashed just 13 months later leaving a pensions black hole of around £571m.

Mr Chappell said he was compelled to put the former High Street giant into administration in 2016 on Sir Philip's insistence and said he had assisted the regulator "right the way through".

His lawyer told the court Mr Chappell was a "political scapegoat" who was being subjected to a "show trial".

But it did him little good since he was found guilty of all three charges and faces an unlimited fine for failing to comply with the regulator's notices.

3) Branson's bonus

Virgin Money came under fire this week for failing to lower the fees on one of its index tracking funds, which costs investors 350 per cent more than near identical products.

The bank's UK Index Tracking Trust, which simply tracks the FTSE All Share index charges 1 per cent, more than those levied by many active funds in the UK market where a fund manager is paid to make daily decisions about the investment.

 With assets of nearly £3bn at the end of 2017, according to FE data, this one passive fund alone will net Virgin Money annual revenue of around £30m.

4) Poor old wealthy footballers

A group of investors including Premiership footballers is seeking redress against Scion Films for losses incurred as a result of investments in film tax schemes.