Life in the fast lane and doghouse: the week in news

Life in the fast lane and doghouse: the week in news

It was A-level results day this week as students up and down the country set upon their career paths - perhaps some of them will find themselves in the financial advice industry and plug the "huge recruitment crisis" that was heralded last week. 

Elsewhere a different set of results saw one of the industry's big fund managers in the doghouse. 

It's time for the week in news. 

1 Pensions cap disputed 

On Tuesday (August 12) Aegon called on the government to lift a "little known" pensions cap and reinstate the money purchase annual allowance from the current £4,000 to its former £10,000. 

The MPAA is the amount a person who has already begun drawing on their pension can pay back into their retirement pot in a given year without incurring a tax charge, and in 2017 the allowance was cut to £4,000. 

But this week pensions giant Aegon warned this was putting thousands of older workers at risk of finding out too late that they have damaged their future pension potential.

Instead it urged the government to substantially increase the limit which it said would "dramatically reduce the number who otherwise accidentally damage their future retirement prospects". 

2 Investors victorious in Sipp ruling 

A group of 176 investors was victorious in a multi-million pound claims case against Berkeley Burke, in a development experts have said could see the self-invested personal pension provider enter insolvency. 

Berkeley Burke had its defence thrown out by the High Court in a case brought by investors after it decided it did not want to participate in the proceedings.

The claimants had suffered losses incurred from high-risk assets invested via Sipps, with the provider ordered to pay an initial payment of almost £1m to cover the claimants' costs. 

Due to Berkeley Burke’s defence proceedings being thrown out the claimants are now permitted to enter judgment and the court will now determine the value of the 176 claims which will have to be paid by Berkeley Burke.

In light of this and the £1m legal bill experts believe there is a possibility the firm may enter insolvency.

The provider's reasoning for not wishing to fight the case any longer was to concentrate instead on its upcoming appeals case against the Financial Ombudsman Service, which is scheduled for October 15.

3 Invesco defends stay in the doghouse 

This week Invesco defended the performance of six of its equity funds after they featured on the latest “dog” list of chronic underperformers, pointing instead to volatility in UK equity markets caused by political uncertainty and "other geopolitical and global economic factors". 

A "dog" fund is that which has underperformed its sector for each of the past three years, with the total level of underperformance being 5 per cent below the index or worse. 

Invesco had six "dog" funds on the list, more than any other fund house. 

Invesco said: "Whilst recent performance has been challenging, our investment process remains robust and we continue to believe in the long term value of the UK equity market."