Week ending 1 February 2019
New rules on ‘wake-up’ packs and proposed drawdown investment pathways
The Financial Conduct Authority has released an update to its Retirement Outcomes Review, which includes reforms on pension “wake-up” packs that must be in place by November 2019. The packs should be sent when the client reaches the age of 50 and comprise only a single-page summary and risk warnings. However, from age 55, the packs should also include a Money Advice Service factsheet, which highlights where to find further guidance and advice.
The FCA is also consulting on introducing investment pathways for non-advised customers in drawdown products. The pathways are designed to cover 4 possible objectives for customers, namely:
- Option 1: I have no plans to touch my money in the next 5 years
- Option 2: I plan to use my money to set up a guaranteed income (annuity) within the next 5 years
- Option 3: I plan to start taking my money as a long-term income within the next 5 years
- Option 4: I plan to take out all my money within the next 5 years.
No Lloyds appeal
The window in which any of the parties involved in the Lloyds Banking case could appeal that High Court judgement has now closed. This means that pension benefits for men and women need to be equalised for the effects of unequal GMPs earned between 17 May 1990 and 5 April 1997.
HMRC to consider pensions tax issues from GMP equalisation
HMRC has confirmed in its recent Pension Schemes newsletter that it is considering the pension tax issues that will arise as a result of GMP equalisation. At this stage all it has said is that further information will be provided in future pension schemes newsletters.