Do you have a Final Salary (Defined Benefit) UK pension scheme?
Is your final salary scheme safe? Are you aware that many of these schemes are seriously underfunded? What is the exact deficit of your final salary scheme? Brexit and the BHS scandal have brought the pension deficit story in to the media spotlight again. However, the issues with defined benefit schemes have been brewing for some time. The UK faces a very real pension crisis with several schemes close to collapse unless serious steps are taken to address the growing problem.
Seasonal workers could be exempt from auto-enrolment pensions
Making sure you have enough money for retirement is a crucial part of your financial planning process. But some workers may struggle to save more than others.
The government is looking to make reforms to automatic-enrolment (AE), possibly putting employees who work seasonally or part-time at a disadvantage when it comes to saving up for their pension.
Many Grandparents missing out on full state pension
The ex-pensions minister Steve Webb is urging the government and the HMRC to do more to alert grandparents to all the pension perks they're entitled to after it was revealed that the overwhelming majority are not receiving the full state pension. By missing out on a particular benefit, unknowing eligible grandparents are missing out on £231 a year. Over the course of their full retirement, this could possibly lead to a loss of thousands of pounds.
It is a scheme called the Specified Adult Childcare Credit. It is thought that only 1,300 grandparents are taking advantage of it despite 100,000 being eligible (a mere one per cent). The scope of the problem was found out by Webb when he sent a Freedom of Information request to the HMRC.
The purpose behind the Specified Adult Childcare Credit is to allow grandparents who give up work completely to help raise their grandchildren the chance to claim National Insurance (NI) credits.
What problems could a rising state pension age cause?
The Pensions and Lifetime Savings Association has issued a strong warning against government proposals to raise the state pension age to 68 (with the possibility of being raised higher to 70). It has said that such a scenario would create significant problems – an "unacceptable detriment" – for those with low life expectancy.
The statement comes in response to a report released by the Independent Review of the State Pension. The review was led by former CBI director general John Cridland.
Details of new pension transfers course released
Any person with either a personal or professional interest in pension transfers in Grand Cayman will be interested to learn that the UK's Chartered Insurance Institute (CII) has announced details of a new pension transfers qualification that is designed to enhance the knowledge of those providing pension transfers advice.
The new level 4 Certificate in Pension Transfers is comprised of four compulsory units, including a new advanced level 6 unit called "(AF7) Pension transfers", as well as the following three CII level 4 units:
Family Court rules on QROPS pension
A judge at a UK court has ruled that limitations in the law mean divorcing partners cannot make claims for the QROPS pensions of their British expat ex-partners.
This ruling relating to overseas QROPS pensions was reached in the High Court as part of the protracted and embittered divorce settlement of Amit and Ankita Goyal.
The couple divorced during the summer of 2013 and an earlier court hearing in October 2015 ruled that the husband should pay a financial settlement to his wife. However, it was not until the High Court decision in October 2016 that clarity was offered in respect of the husband's £87,000 India-based QROPS pension.
What should you do with your pension?
One of the most common questions asked of expat financial services firms is what should clients do with their pensions. Some wish to keep all their money in a UK-based pension, some will look to transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS) and others will want to take a tax-free lump sum from their fund. In short, what an individual chooses to do will depend heavily on their personal circumstances together with any advice they receive from their expat financial services professional.
Advice requirement question in pension transfers for expats
Pensions transfers for expats may become simpler if the Department for Work & Pensions follows through on plans to drop the requirement for consumers to receive accredited advice before making an expat pension transfer.
News of the DWP's plan came via a consultation paper published on 30 September. However, before the government gives the go-ahead to any such change in the law as is it relates to pensions transfers for expats, it is first looking for the views of experts and stakeholders.