Pensions  

Pension switching times and Woodford woes: the week in news

Pension switching times and Woodford woes: the week in news

Prime minister Boris Johnson made his way to the continent this week to woo European leaders with proposed changes to Britain's withdrawal arrangement.

It seems his proposals were received only a little better than the suggested state pension age hike which was floated this week, while advice fees and Woodford woes hit the headlines once more. It's time for the week in news.

1 Fees galore

Research from consumer site Which found fees for advice could vary by as much as 900 per cent for the same client.

The site urged consumers to shop around for advice after the findings showed a client with £100,000 in savings and a £150,000 pension could be charged between £500 and £5,000 for advice.

But some advisers defended the fee structure, arguing that comparisons such as Which's often missed out "a lot of key information" such as what was included and whether the adviser or firm was chartered.

Ricky Chan, director at IFS Wealth & Pensions, said he could say "for certain" that the £500 quote Which found was "misleading" and a "huge anomaly", even if the advice had "significant shortcuts".

2 More Woodford woes

The embattled fund manager Neil Woodford faced more bad news this morning when the shares of one of his investments, Eddie Stobart Logistics, were suspended.

The shares, of which Mr Woodford is the largest single holder, were suspended when the chief executive resigned and accounting problems meant its results would not be published on time.

The funds he manages own 23 per cent of the company and the shares are mostly held in his stricken Equity Income Fund, which was suspended in June after a wave of investor withdrawals.

On top of this, the board of the Woodford Patient Capital investment trust, which Mr Woodford manages, announced it had revised down the value of one of trust's unquoted holdings, IH International.

This means investors in the fund face a reduction in their investment and shares in the trust fell from 44p to 38p (13 per cent) this morning, but have since bounced back to 42p.

3 Up up up it goes

Several advisers slammed the idea of increasing the state pension age to 75 this week after the proposal was floated by think tank the Centre for Social Justice.

Currently, the age at which individuals can claim their state pension is set to rise to 66 by 2020, 67 between 2026 and 2028, and 68 between 2044 and 2046.

But the think tank told the government it should rise to 70 by 2028 and 75 by 2035.

One adviser criticised the proposals, arguing it would have a negative impact on pensions as the government would be "asking people to pay into something...to receive payment back for a handful of years".

Others thought the new age system and auto-enrollment needed time to "bed in" before any further changes were decided.

4 Chartered only

Belmayne Independent Chartered Financial Planners set out on a recruitment drive this week, announcing it was seeking advisers with chartered status to join its Dronfield-based business.