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Johnson, Javid and more Woodford woes: the week in news

Johnson, Javid and more Woodford woes: the week in news

It has been a major week for politics with Boris Johnson bagging the win in the Tory leadership campaign, making him the UK’s next prime minister.

Meanwhile, investors continued to doubt Neil Woodford and the government's pensions department seemed to have forgotten what data it does and doesn't hold.

It’s time for the week in news.

1 It’s not me, it’s you

Neither HM Revenue & Customs nor the Department for Work and Pensions hold any data on the changes to people’s state pension forecasts, FTAdviser found out this week.

In a Freedom of Information request, HMRC stated it did not hold the relevant information. Back in May the DWP told parliament it also did not have this data.

The two departments have declared the other was responsible for the data, with minister for pensions and financial inclusion Guy Opperman stating the forecasts were based on HMRC insurance records.

On the other hand, the taxman said the responsibility for the data sat with the DWP.

The issue emerged in January last year when it was revealed some of the state pension forecast could be showing incorrect amounts, especially for people with contracted out benefits.

This meant the forecasts could show more income than the individual would receive since it would include contracted out savings.

2 More Woodford woes

Data from Morningstar showed investors withdrew an average of £7.5m from Woodford's Income Focus fund every working day in June.

The fund shrank from £496m at the start of June to £296m at the end of the month due the withdrawals and poor performance.

The news came after nearly two months of drama surrounding his flagship Equity Income fund, which was suspended on June 3 following a sustained period of outflows which hit £9m a day in May.

It had unquoted and illiquid assets which are difficult to sell quickly, making it more difficult to deal with outflows — a problem which the Income Focus Fund does not suffer from.

3 Dear Prime Minister

As former Mayor of London and foreign secretary Boris Johnson bagged his position at no 10 Downing Street, advisers urged the new prime minister to tackle a range of financial issues.

Pensions tax relief changes topped the list of problems they thought should be on his to do list, as concerns about doctors’ and teachers’ pensions continued to hit the headlines.

Some also thought a slowdown of regulatory changes could help the financial sector, while others asked for a simplification of income tax or a stamp duty shake up.

FTAdviser also looked at what to expect from the new chancellor, Sajid Javid MP.

It is likely there will be no tax increases while Mr Javid has the keys to the Treasury, with both him and Mr Johnson backing tax cuts — especially in a no-deal Brexit scenario.

Mr Javid is also on the record proposing a scrapping of auto-enrolment as a possible business breather if Britain were to leave the EU without a deal.