7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.
In this 7 Days
- Response to consultation on proposals relating to the function and jurisdiction of TPO
- Revised no-deal Brexit guidance
- New ScamSmart campaign
- NHS pensions for senior clinicians: new changes announced
- TPR publishes blog on action against pension scammers
On 8 August 2019, the Government published the response to its consultation on measures to:
- make new provision for dispute resolution by TPO, in particular a function for early resolution of disputes before a determination
- allow an employer to make a complaint or refer a dispute to TPO on behalf of itself, where for example the employer chooses to use a GPP arrangement to provide pensions for its employees
- make provision in relation to associated signposting.
Overall, the responses were very supportive of the proposals. The Government will now seek to bring forward legislation to provide a framework for them in due course.
Any amendments to the signposting requirements will need to be set out in secondary legislation (ie in regulations). If needed, the Government intends to bring draft regulations forward to follow on from the necessary primary legislation following further conversations with the FCA.
On 8 August 2019, the Government updated its guidance on benefits and pensions in the case of a no-deal Brexit for UK nationals living in the EU, EEA or Switzerland and for EU, EEA and Swiss citizens living in the UK.
On 7 August 2019, the FCA and TPR announced that they are joining forces again this summer to warn the public about fraudsters targeting people’s retirement savings. This warning comes as new research suggests that 42% of pension savers could be at risk of falling for at least one of six common tactics used by pension scammers:
- Offering exotic investment opportunities – 23% of 45 to 65 year old pension savers would pursue an offer of high returns in either overseas properties, renewable energy bonds, forestry, storage units or biofuels, even though the research notes that these are high-risk investments and unlikely to be suitable for pension savings
- Calls out of the blue – 23% of 45 to 65 year old pension savers would engage with a cold call from a company asking to discuss their pension plans
- Offering early access to your pension pot – 17% of 45 to 54 year old pension savers would be interested in a company that offered to get them early access to their pension pot
- Guaranteed high returns on your pension savings – 13% of 45 to 65 year old pension savers would pursue an offer guaranteeing returns of 11% on their pension savings
- Offering to review your pension for free – 10% of 45 to 65 year old pension savers would say “yes” to a free pension review from a company they had never dealt with before
- Time limited offers – 7% of 45 to 65 year old pension savers would say “yes” to a company offering a special deal that would not be around for long and which also offered to send a courier to sign the paperwork immediately.
As a result of the above, the regulators are joining forces to urge pension savers to be ScamSmart and to check who they are dealing with before making any decision on their pension. Last year’s ScamSmart campaign resulted in more than 370 people being warned about unauthorised firms. This year’s campaign is currently running on TV, radio and online.
On 7 August 2019, the Department of Health and Social Care announced that it will open a new public consultation proposing full flexibility over the amount senior clinicians can save into their pension pots. This new consultation will replace the 50:50 proposal put forward for consultation in July (see 7days).
Starting from the next financial year, the new rules are designed to allow senior clinicians to set the exact level of pension accrual at the start of each year. For example, 30% contributions for a 30% accrual rate, or any other percentage in 10% increments depending on their financial situation. This is intended to give them room to take on additional work without breaching their AA and facing tax charges. Employers would then have the option to recycle their unused contribution back into the clinician’s salary.
Alongside the proposals for full flexibility, HMT intends to review how the tapered AA supports the delivery of public services such as the NHS.
On 9 August 2019, TPR published its latest blog, “Let’s join forces to beat pension scammers once and for all”.
In the blog, Charles Counsell OBE discusses the action TPR takes against scammers and publicises the latest ScamSmart campaign (see above).