But a different name dominated the news in the finance world as Neil Woodford suspended his flagship fund, triggering big industry names to pull their support for the previously revered asset manager. It’s time for the week in news.
1 A week of Woodford woes
The industry had a shock on Monday when asset manager Neil Woodford suspended trading on his flagship Equity Income fund in an attempt to deal with a surge in redemptions from investors.
The fund had slumped 9 per cent over the last month and investors had withdrawn about £9m every working day in April.
The trigger point of the sorry tale was when Kent County Council decided to withdraw all of the £250m it had invested with him on the very same day Kier Group, one of the fund’s substantial holdings, had a share fall of 40 per cent.
Mr Woodford then released a video where he said he was "extremely sorry" for the fund suspension and blamed the stock market for "anticipating" a decline, but that didn’t stop St James’s Place — a previously steadfast supporter of the under-performing fund manager — from firing Mr Woodford as manager of the £3bn of assets he ran for its clients.
But the Financial Conduct Authority took a lighter view. The City watchdog said suspensions were a recognised, legitimate tool and that it was not an outcome it wished to avoid if it was in the best interest of investors.
2 Saver saved from tax charge
In a landmark case about the pensions lifetime allowance, HM Revenue & Customs withdrew its appeal against a consumer who accidentally transferred too much money into his pension schemes.
Gary Hymanson had failed to cancel a standing order which tipped him over the just above £1m lifetime allowance, meaning HMRC wanted to levy a 55 per cent tax charge on the extra funds.
He had four pension schemes and although he understood he couldn’t contribute more to his main scheme, he didn’t realise he had to stop the payments into his other schemes too.
The decision sets a precedent for all those who have, or could do in the future, accidentally exceed the lifetime allowance.
Such consumers now have a good case to go back to HMRC and challenge the tax penalty.
3 Doctor doctor, I’ve got too big a pension
The government offered a ‘50:50’ solution to the ongoing problem that doctor’s tax charges are causing some GPs to retire early or cut their working hours.
Under current rules, many doctors exceed their pension savings allowances — which means they face huge tax bills — as there is no flexibility on the rate at which the pension builds up.
The new plan would mean doctors could halve their contributions in exchange for halving the rate of pension growth.
But this will not remove the incentive for doctors to reduce their working hours, according to chair of the BMA Dr Chaang Nagpaul, who said there needed to be wider reform.
4 A cleaner Aviva
It was revealed 1,800 jobs were at risk at the insurance giant Aviva as the company announced plans to save £300m, even though its chief executive said he would aim to "minimise redundancies".
Other saving methods included cutting central costs, making savings in contractor and consultant spending, and a reduction in project expenditure as chief executive Maurice Tulloch said the company would become "simpler, more competitive and more commercial".
In keeping with a current common theme among insurers, Aviva also confirmed it was to divide its general insurance business from its life insurance as "skill and expertise could be focused more effectively" if separate.
imogen.tew@ft.com
