Pensions  

Liberty folds and scam warning sounded: week in news

Liberty folds and scam warning sounded: week in news

The UK found a new hero this week as the country collectively celebrated Captain Tom Moore’s 100th birthday after he raised more than £30m for NHS Charities — a shimmer of light amid the coronavirus crisis.

Meanwhile the global pandemic continues to affect the financial world, prompting savers to dip into their pension pot before the age of 55 and triggering warnings from pension schemes about the risk of pension transfers. It’s time for the week in news.

1 Warning bells over pension transfers 

It emerged this week pension scheme trustees were set to warn members about the risks of transferring out of their defined benefit scheme amid the Covid-19 crisis. 

According to guidance published by the Pensions Regulator on Wednesday (April 29) trustees will be asked to send DB members looking to move their retirement funds a letter, warning of the risks during the pandemic and urging them to consider the decision carefully.

The news came as it emerged anxious savers are moving to cash in their pensions more than 20 years before they are allowed to do so, with concerns online scammers are exploiting financial distress amid the coronavirus pandemic.

According to online pension provider PensionBee, the number of people looking to withdraw their pensions before the minimum age of 55 soared more than sixfold in just three months, from five in December to 31 last month.

2 FCA figures reveal state of advice market 

This week FTAdviser revealed 1681 advice firms had cancelled their FCA authorisations and left the market since 2015, as concerns over the state of the UK advice industry have resurfaced. 

An FOI submitted to the regulator also showed the number of IFAs fell last year for the first time since the introduction of the Retail Distribution Review, a trend which is set to accelerate amid increasing consolidation in the market. 

Commentators suggested the figures indicate the growing pressures facing advice businesses, with the burden of regulation and a hardening professional indemnity insurance market proving too much for some smaller firms.

3 On your bike

After nearly two decades, Tom McPhail has decided to hop on his bike and pedal away from the world of pensions.

The Hargreaves Lansdown lobbyist announced via twitter this week (April 27) that he would be leaving his role as head of policy to start a new career path in public affairs for an electric scooter retailer, owned by none other than Adam Norris, former creator of Hargreaves Lansdown’s pensions business.

Speaking about his departure, Mr McPhail said: "I’ve long been an enthusiast for two wheeled transport and this is an opportunity for me to step away from financial services and involve myself in a business closely aligned with how I’d like to live my life."

Lots of people were sad to see him go, saying it will be "a huge loss to the world of pensions". 

4 Another Sipp bites the dust

Bad news for the industry this week with hundreds of claims expected to go to the Financial Services Compensation Scheme (FSCS) as troubled self-invested personal pension provider Liberty Sipp fell into administration.