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
- Department for Exiting the EU
- Financial Ombudsman Service highlights increase in complaints relating to SIPPs
- Law Commission – consultation on electronic signatures
- The Pensions Advisory Service – a starting point for independent and impartial pensions guidance
Alongside a speech delivered on 23 August 2018 by Dominic Raab, the Secretary of State for Exiting the European Union, the Government published a series of technical notices on how to prepare for Brexit if there is no deal, and a notice (published the following day) setting out the background to the Government’s Brexit work to date.
“No deal” is the situation which could be reached if “the UK leaves the EU and becomes a third country at 11pm GMT on 29 March 2019 without a Withdrawal Agreement and framework for a future relationship in place between the UK and the EU”.
The Secretary of State was keen to point out that the Government continues to negotiate for a deal but that it is the Government’s duty “to plan for every eventuality”. This is why it has now published the first 25 technical notices, in what is due to be a series, setting out what people and businesses may need to do if no deal with the EU is reached. These include notices on “Workplace rights”, “VAT”, and “Banking, insurance and other financial services”. Further technical notices are due to be published in September 2018.
Whilst the notices published so far do not specifically cover pension schemes, some of the issues flagged will be relevant. For example, the note on Banking, insurance and other financial services highlights some potential difficulties for UK-based payment services providers, which could lose direct access to central payments infrastructure. This could lead to increased costs and slower processing times for Euro transactions. In addition, EEA customers (including UK citizens living abroad) could lose the ability to access UK bank accounts, as well as insurance contracts, such as life insurance policies and annuities.
The Government says it is “committed to putting in place unilateral action, if necessary, to resolve these issues as far as possible on the UK side.” But reciprocal action from the EU would be needed to address the issues for services provided into the EEA.
On 21 August 2018, FOS published the latest issue of its ombudsman news.
In this edition, FOS reveals a significant increase in the number of complaints relating to SIPPs. During the first quarter of 2018/19, FOS received 1,107 SIPP related enquiries, compared with 678 over the same period in 2017/18. Fifty-two per cent of complaints relating to SIPPs were upheld during the year to March 2018 – one of the highest rates of cases upheld in relation products supervised by FOS.
The newsletter also includes a number of case studies relating to complaints about fraud and scams.
The Law Commission has confirmed that electronic signatures can be used to sign formal legal contracts under English law, and has published early conclusions which aim to sweep away current legal uncertainty and to allow businesses to speed up transactions by going fully digital.
Currently, the EU-wide eIDAS regulation (which sets out the rules for electronic identification and trust services) provides that an electronic signature cannot be denied legal validity simply because it is electronic and that electronic signatures are admissible in evidence in legal proceedings. However, although the Electronic Communications Act 2000 mirrors this admissibility provision, it does not expressly provide for the validity of electronic signatures. The Law Commission believes that this lack of clarity is discouraging businesses from executing documents electronically, when it would be quicker and easier to do so.
Therefore, in plans published on 21 August 2018, the Law Commission seeks to end that uncertainty by setting out their view that electronic signatures are valid and will generally meet the statutory requirements where there is an intention to authenticate the document. It is also consulting on possible steps designed to further boost business and to help the UK capitalise on new technologies, by proposing:
- that electronic signatures could be witnessed through shared online platforms, such as by webcam or video link, and
- the formation of a Government backed industry working group to consider the ongoing practical issues around the use of electronic signatures, and how these can be improved.
The Law Commission also asks whether there should be a further project on the concept of deeds, and whether these are “fit for purpose in the 21st century”.
Law Commissioner Stephen Lewis said: “Contract law in the UK is flexible, but some businesses are still unsure if electronic signatures would satisfy legal requirements. We can confirm that they do, potentially paving the way for much quicker transactions for businesses and consumers. And not only that, there’s scope, with our proposals for webcam witnesses, to do even more to make signing formal documents more convenient, speed up transactions and get business booming.”
The deadline for responses is 23 November 2018.
Drawing parallels between Bank Holidays and pensions often leaving people feeling “discombobulated”, TPAS took the opportunity of the long weekend to encourage people to become “empowered consumers of pension expertise”.
TPAS notes that people may need more than just education when it comes to their finances and retirement planning. It therefore reminds people that it offers independent and impartial guidance, and can be a “great place to start” for retirement planning. From there, “the customer may go to the provider or, with the enormity of the decision, pay for regulated advice.” TPAS goes on to state that it, providers and financial advisers are not in competition and that they “should be working harder to allow customers [to] move between [their] complementary services”.