Pensions  

What can advisers expect from the Queen's Speech?

“The good news is after intense calls from the pensions industry, the bill now includes fraudulent paid-for adverts, giving greater protection to people from financial scams.” 

Financial Services Bill

There are growing expectations of a Financial Services Bill as part of the Queen’s Speech, given the Financial Conduct Authority’s proposed consumer duty rules coming in next year.

Industry members are calling for clearer boundaries around what is deemed as guidance and what is deemed as advice.

AJ Bell’s head of retirement policy Tom Selby, said: “Providers want to support savers and retirees more but are held back due to the lack of clarity in the rules of when guidance ends and advice begins. If this problem is not addressed then the aims of the consumer duty risk being undermined and millions of people will face the likelihood of making poor retirement decisions.

“Given it is those on lower incomes who cannot afford to pay for advice who are most in need of non-advised support, this has the potential to become a central pillar of the government’s ‘levelling up’ agenda.”

However, Selby said in order to do this, it will likely require both regulatory and political will, and the Queen’s Speech offers an ideal opportunity for this.

Likewise, Canada Life’s technical director Andrew Tully, said he is expecting a Financial Services Bill within the Queen’s speech that may include announcing reforms to the Solvency II regime. 

“A consultation looking at the Solvency II regime is currently open but if further announcements are made tomorrow which include a loosening of the current system, this may help increase annuity rates,” he said. 

“This would be welcome and would come off the back of annuity rates which have already enjoyed a 20 per cent increase this year to date.”

Retirement policy

Other areas of retirement policy that need to be addressed, according to Selby, is the 2017 review of automatic enrolment which recommended removing the earnings bands, so every pound earned qualifies for a matched employer contribution, and reducing the minimum age from 22 to 18. 

“The government has committed to doing this by the mid-2020s, although this rather woolly ambition has yet to be turned into legislative reality,” he said.

“The government’s proposed solution to the problem of low-earning members of net pay pension schemes missing out on valuable pension tax relief also requires legislation. However, it is not clear either of these issues will be addressed in the Queen’s Speech.”

Similarly, Aegon’s Smith agreed as she said one notable absence will be a pensions bill which is needed to implement the long-awaited 2017 reforms of auto-enrolment. 

“It’s absolutely critical that this is introduced in next years’ Queen’s Speech at the latest to give any chance of the reforms being implemented in the mid-2020s, as originally recommended.