Latest news with #pension
Bloomberg
18 hours ago
- Business
- Bloomberg
A $520 Billion Retirement System Comes Under Fire in Western Canada
In the span of eight months, the pension manager for Canada's wealthiest province fired its entire board, shuttered new offices in Singapore and New York and cut more than two dozen jobs. If Premier Danielle Smith has her way, that's just the start of sweeping changes for the C$180 billion ($131 billion) Alberta Investment Management Corp. — and perhaps Canada's entire pension system.
Yahoo
19 hours ago
- Business
- Yahoo
Why thousands of women are missing out on full state pensions
Last week's announcement of the new pension commission was accompanied by a deluge of papers and research. These highlighted key groups who are being left behind by the current pension system – among them were the self-employed, younger people and women. The gender pension gap is an enormous issue – according to the research it stands at 48%. The most recent data (2020 to 2022) estimates that the average pension wealth of those aged 55 to 59 was £81,000 for women compared to £156,000 for men. So why is this? Auto-enrolment has played an important role in getting more women saving into a pension, but major challenges remain. Women are more likely to take career breaks due to having children or looking after loved ones. If they return to the workplace, it is often on lower wages or in part time work and their prospects for career development are hampered. Read more: How to make pension pots tax-efficient This mix of circumstances conspires to make sure women save less into their pension and get less out of it. Added to this, many women working part time do not earn enough to hit the auto-enrolment trigger so miss out on a workplace pension. It's a fault not of women's making and needs reform, such as increased access to flexible working and good quality affordable childcare to help women return to the workforce and build their financial resilience. There are a couple of top tips to be aware of that might prove useful though. Workplace pension contributions Wherever possible try and maintain your workplace pension contributions when you go on maternity leave. If you qualify for statutory maternity pay, your employer needs to maintain their pension contributions if you are still in the scheme. This means that even though your contributions will dip as pay reduces, your employer needs to maintain theirs at the same level. Contributions from your spouse If you aren't working, it might be worth seeing if your spouse or partner can contribute to a pension on your behalf. Read more: How to get the best currency exchange deal for your holiday money You can currently contribute up to £2,880 per year to the pension of a non-working spouse and they will receive a tax relief top up from the government bringing it to £3,600. State pension Make sure you claim child benefit in your name as it comes with a national insurance credit that goes towards your state pension. Many women miss out on this either because their partner has claimed the benefit in their name, or because families opted out of receiving child benefit after the introduction of the high-income child benefit tax charge. Under this charge you receive child benefit but if you earn more than £60,000 the government starts to claw it back through a charge you need to pay through self-assessment. By the time you hit an annual income of £80,000 per year you effectively have to repay the whole of your child benefit. This led to many people opting out because of the admin hassle without realising the impact on their state pension. Now you have the option of ticking a box that says you don't want to receive the child benefit, but you do want the national insurance credit. Read more: Three key issues for the Pension Commission How your health can affect your pension How much money do you need to retire?\擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Telegraph
a day ago
- Business
- Telegraph
Savers hit with hefty fees at Britain's biggest pension scheme
Britain's biggest pension scheme is set to charge workers hundreds of pounds in additional fees because of delays in paying off its taxpayer-funded loan. National Employment Savings Trust (Nest) levies a 1.8pc 'contribution charge' on its 13.8 million members to help pay off a £1.2bn debt to the Government. The loan was initially scheduled to be repaid by 2032, but this was pushed back to 2038 because of slower than expected income growth. The delay means a worker earning £50,000 who saves with Nest would pay an extra £440 in contribution charges over the seven-year period from 2032 to the end of 2038, analysis shows. A worker earning £100,000 would pay £945 more. Nest was created in 2010 to ensure that all workers can save into a pension. The scheme was designed to be a 'low-cost' alternative to traditional pension funds. However, industry experts have accused Nest of offering members and taxpayers poor value for money, as high fees are used to cover a mountain of debt and generous staff pay. A previous Telegraph investigation found that six Nest employees are paid over £250,000 a year, while 17 earn more than Prime Minister Keir Starmer. Nest levies an 'annual management charge' of 0.3pc on the total value of a pot each year, in line with rival pension schemes such as the People's Pension and Now Pensions. Yet unlike with other providers, Nest savers also incur a second fee – a 'contribution charge' of 1.8pc on each new payment into their pot. Nest has insisted that the contribution charge is levied on members in order to pay off the government loan taken out to set up the scheme. But it has refused to rule out keeping the charge, even once the debt has been fully repaid. The loan was worth £171m in 2012, but annual interest and additional borrowing has meant the debt has now risen to almost £1.2bn. Nest's latest annual report shows that it made a profit for the first time this year, and made its first £6m repayment towards the loan. It said that it was on track to fully repay the loan by 2038. However, George Sweeney of Finder, said the initial repayment was 'a drop in the ocean' compared to the remaining balance, and that the 2038 repayment date was 'highly optimistic'. He added: 'Even assuming the loan doesn't grow further – which it will, due to accruing market-rate interest – Nest would need to repay around £92m per year for 13 years. That's over 15 times the amount it repaid this year. 'The scheme is banking on continued growth in member numbers and assets under management to speed up its loan repayments. 'While Nest may experience continued growth, the scale up required to hit the 2038 repayment goal seems somewhat unrealistic. 'If Nest falls short, it's the members who will lose out, continuing to pay the fees that were supposed to help pay back this loan.' Tom Selby, of wealth management firm AJ Bell, said: 'Nest's 1.8pc contribution charge was always an awkward compromise designed to help pay off its massive set-up loan, adding extra cost and complexity for members. 'While Nest eventually becomes a low-cost pension scheme for most people, the contribution charge clearly eats into that value and continues to be a running sore for the scheme. 'From the perspective of millions of hard-working pension savers, the sooner the loan is paid off and the contribution charge consigned to the dustbin, the better.' Nest was approached for comment.
Telegraph
a day ago
- Business
- Telegraph
Millions to lose up to £18,000 in savings from pension reforms
Millions of workers in their 50s face losing up to £18,000 if the Government accelerates a rise in the state pension age, a leading wealth manager has warned. Rathbones, which manages the savings of older people, said introducing a state retirement age of 68 earlier than planned threatened to hit people aged 51 the hardest, while people aged 52 and 53 would also lose out. The Government is exploring whether to raise the state pension age to 68 more quickly. It is currently set to be phased in from 2044, but Liz Kendall, the Work and Pensions Secretary, is considering bringing this forward five years to 2039 as part of the Government's pensions review. According to Rathbones, those aged 51 would lose an entire year's worth of state pension payments if the timetable is accelerated. That would be worth £17,774, assuming today's state pension of £12,000 increases by the so-called triple lock each year. Under the triple lock, the state pension rises by the highest of inflation, average wages or 2.5pc per year. Meanwhile, people aged 52 would miss out on £17,340 and those aged 53 would lose £16,918. Each of those age cohorts – 51, 52 and 53-year-olds – comprise some 800,000 people, meaning around 2.4 million risk missing out on significant five-figure sums. Rebecca Williams, from Rathbones, said Britain's ageing population would put a growing strain on the public finances. She said: 'With longevity increasing and population pressures mounting, future generations appear set to face a less generous state pension regime than that enjoyed by many of today's retirees. 'The situation appears particularly precarious for those in their early 50s who face the real prospect of missing out.' The state pension age is currently 66 and will rise to 67 by 2028. Spending increasing Raising the state pension age is likely to prove politically challenging. Previous pension reviews recommended increasing the pension age in the late 2030s, but the move was not put into legislation. However, financial pressure is growing, and Ms Kendall acknowledged when launching her review that she was 'under no illusions' about the scale of the challenge. Estimates from the Office for Budget Responsibility (OBR) show that state pension payments will amount to 5.1pc of GDP this year, up from 3.6pc two decades ago. That bill will keep on mounting, rising to almost 8pc by the 2070s. Overall spending on pensioners, including the state pension, housing benefit and winter fuel payments but not counting healthcare costs, came to £150.7bn last year and will rise to £181.8bn by the end of the decade, according to the OBR. The Government has sought to limit the increase by restricting the share of pensioners who receive winter fuel payments. However, it was forced into a partial about-turn after a backlash from voters and Labour's own backbench MPs, showing the difficulties of reining in benefits spending. It means there is increasing pressure from the public finances to find ways to save money for the long term, potentially including further increases in the pension age. The Institute for Fiscal Studies estimates that raising the pension age by one year saves the Government around £6bn per year. Nigel Farage, leader of Reform UK, last week said the state of the public purse means the pension age should be increased more rapidly, in line with life expectancy. 'I don't think we can really afford to [wait to the 2040s], to be frank,' Mr Farage said. 'If there is a sudden economic miracle, then it might change that. But it does not look to be happening any time soon.' The International Monetary Fund last week said that if the Government stuck to its promise not to raise taxes on 'working people', then it would have to consider reining in spending, 'to align better the scope of public services with available resources'. 'In particular, the triple lock could be replaced with a policy of indexing the state pension to the cost of living,' the global economic watchdog said.
Daily Mail
2 days ago
- Business
- Daily Mail
Will I lose the Winter Fuel Payment if I make a pension withdrawal to replace my 'clapped out' car?
I read your article about the Winter Fuel Payment and the HMRC limit of £35,000. I have a small private pension plus my state pension. I now need to draw a lump sum of money from my pension pot, which I built up for nine years during self employment, to replace my 'clapped out' car. This could take me over the £35,000 income for the year. Do I now need to return my Winter Fuel Payment? We can't really afford to take out a loan for the car, nor would we want to with sufficient funds sitting in my pension pot. Am I now to be punished once again for putting things in place for my old age? Steve Webb replies: If your total income from your state pension, regular private pensions and lump sum pension withdrawal takes you over the £35,000 limit, then yes, your extra tax bill next year will wipe out the value of your share of this year's Winter Fuel Payment. However, it is worth remembering that, assuming you and your partner are under 80 and not receiving benefits, you are probably each receiving an equal share of the total £200 Winter Fuel Payment. It is only your share (typically £100) which is at stake if your income goes above £35,000, rather than the total household payment. There are some further aspects of this which might be worth bearing in mind. The first is that what affects your WFP is your individual income, not the combined income of you and your spouse or partner. This means that if your partner had access to a pension pot or other savings and could do this without taking their income above the £35,000 limit, then the car could be purchased without affecting the payment at all. Alternatively, if your partner was able to make some contribution to the car, but not the full amount, another option would be for you to chip in by taking a smaller pension withdrawal to 'mop up' any spare income between your current annual figure and the £35,000 limit. You could do this without affecting your WFP entitlement. Depending on the state of your 'clapped out' car, another angle to think about is whether you could hold on until the end of this tax year. If so, you could take your withdrawal in two lumps, one before 6 April 2026 and one afterwards. Provided each individual lump kept you within the limit, then your WFP would be unaffected. How do you send back a Winter Fuel Payment? Turning now to your comment about 'returning' your WFP, it's worth being clear how the process will work from this winter onwards. Under the new system, everyone who is over state pension age should be paid a WFP in full, regardless of their income. HMRC will then identify at the end of the year those individuals who had income over £35,000 and will add an amount to their tax bill to offset the WFP they received the previous winter. So you are not exactly 'returning' the WFP, you are simply facing a slightly higher tax bill next year. If you prefer, the Government has said that it will be possible, in principle, to opt out of the WFP system. But in your situation, where your income is only temporarily over the limit for one year, it's hard to see what you would gain by doing this. It would probably be far simpler to simply get a WFP, put it in the bank and earn a bit of interest, and then use it to help pay your increased tax bill for one year. If you are determined to avoid this situation you could in principle opt out this year, and then (presumably) opt in again the following year, but we have yet to see any details as to how all of this will work and how bureaucratic the whole process will be. Ask Steve Webb a pension question Former pensions minister Steve Webb is This Is Money's agony uncle. He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement. Steve left the Department for Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock. If you would like to ask Steve a question about pensions, please email him at pensionquestions@ Steve will do his best to reply to your message in a forthcoming column, but he won't be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons. Please include a daytime contact number with your message - this will be kept confidential and not used for marketing purposes. If Steve is unable to answer your question, you can also contact MoneyHelper, a Government-backed organisation which gives free assistance on pensions to the public. It can be found here and its number is 0800 011 3797.
