Contact

News & Insights

How safe is your pension?

Labour MP John Mann, who is a member of the Commons Treasury Select Committee, said: ‘Sir Philip Green and his family have made millions out of BHS and its hard-working staff. He took over a company with a healthy pension pot, yet when he sold BHS a black hole had appeared in its fund.’

The Guardian has calculated that Green and his family collected £586m in dividends, rental payments and interest on loans during their 15-year ownership of the retailer. 

 

What is the pension protection fund and what does it do? 

The Pension Protection Fund was established to pay compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation.

What does it offer:

1) If you were retired and over the scheme’s normal retirement age when your employer went bust, and receiving your pension then the Pension Protection Fund will generally pay 100% level of compensation.

2) If you retired early (except through ill-health) and had not reached your scheme’s normal pension age when your employer went bust, then you will generally receive 90% level of compensation based on what your pension was worth at the time. The annual compensation you will receive is capped at a certain level. The cap at age 65 is, from 1 April 2016, £37,420.42 (this equates to £33,678.38 when the 90 per cent level is applied) per year.

3) When you reach your scheme’s normal retirement age, you will be paid compensation based on the 90% level subject to a cap, as described above.

With all of the above, payments relating to pensionable service from 5 April 1997 will then rise in line with inflation each year, subject to a maximum of 2.5% a year. Payments relating to service before that date will not increase.

What it doesn’t offer:

Flexible drawdown, self-management or the ability to transfer.

For all of you that are members of a company pension scheme, if you haven’t done so already, it is time to find out if the pension scheme is fully funded; that means it has enough money to cover its pension liabilities or if it is in deficit. If it is in deficit you need to know by how much, what the company plans are to rectify this and, most importantly, how stable/safe the company you work or used to work for is. Is there a real possibility that the company could fail?  If so, I would seriously consider transferring your pension out of the scheme if you are able to.

Other News

Expats look to invest in UK property market

Clients of expat financial services providers are using the nose-diving pound as an opportunity to invest in the UK buy-to-let property market, with lenders reporting an 80% increase in mortgage applications from British expats looking to make secure future financial provision.

It is a curious position: expats benefiting from economic uncertainty in their home country in order to invest in its property market at a time when the pound is approaching ten-year lows against many of its rival currencies. So, how easy is it?

Read More

2019 May Be A Testing Time

Start line on a mountain roadAnother year is nearly over with a new one about to begin and while the financial outlook for 2019 looks unclear, one thing we can say with some certainty is that the financial markets have been anything but boring during 2018. Volatility has been at the fore, lately mainly as a result of political uncertainty in Europe and the UK, and the American/Chinese trade war.

On the monetary front, the belief is that US interest rate expectations are peaking and that we will possibly have two more hikes in 2019 at 0.25% each. With little chance of interest rate rises in Europe this will mean little respite for hard pressed savers.

Read More

Select your country

Please select your country of residence so we can provide you with the most relevant information:

You are currently viewing the Blacktower Financial Management EU website.

You may be looking for the Blacktower United States website.

Blacktower United States > X Stay on this site

Or choose your country.