Latest news with #JonGreer
Scottish Sun
2 days ago
- Business
- Scottish Sun
Warning for savers over pension cash bonuses that could leave you £1,000s worse off
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) THOUSANDS of savers have been warned against moving their pension to a new provider in order to get a cash bonus. Some firms offer free cash payments of up to £4,100 to encourage customers to move or combine their pensions with them. 1 The regulator has warned that customers are being lured into changing their provider with short-term cash bonuses Credit: Getty But pension savers are focusing on these short-term rewards rather than the full financial implications of their decision, the Financial Conduct Authority (FCA) said. The Sun had previously warned of the danger of these cash bonuses as often they can tempt savers to switch their pension to a provider with higher fees. This can eat into their pension returns in the long term. The regulator added that pension firms have made an effort to flag the benefits of their existing scheme to customers. The regulator said that pensions dashboards will make it easier for customers to track their pensions. The dashboards will allow customers to see all of their pensions and balances in one place. This may also increase the number of people who want to combine their pension pots, the regulator said. The research was published as part of the FCA's review of life insurers' pension transfers. The regulator said on its website: 'We expect firms to be resourced with sufficient, well-trained staff to service the products they have sold or acquired and be able to respond to foreseeable spikes in demand.' Under Consumer Duty rules, firms need to put customers' needs at the heart of what they do. The FCA said it expects firms to support customers in making informed decisions. This means they should make sure they give customers enough information when they communicate with them. The FCA's website said: 'Our findings suggest that firms are well-intentioned and seek to ensure consumers receive good outcomes when transferring their pensions.' Jon Greer, head of retirement policy at wealth manager Quilter, said: 'The FCA has said it is concerned that consumers are transferring their pension provider simply to take advantage of an immediate or near-term reward or incentive.' He said cashback for pension transfers 'could be a very tempting offer' for many people. He continued: 'However, many consumers will be unaware of the benefits their existing pension arrangements may have, and that by transferring you automatically give these up. "This can include a higher tax-free lump sums or the earliest age you can access benefits – it all depends on the terms of the scheme." He added that although the FCA suggests that firms are doing what they can to provide that information to customers' looking to transfer their pensions, it is still an uphill battle to get people to engage with them. Common pension mistakes to watch out for YOUR pension can help you to build a substantial nest egg for your retirement. But you may end up with less than you think if you fall for common pension mistakes. Almost a fifth of people do not know how much money is going into their pension, according to a recent Hargreaves Lansdown study. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said this means you are less likely to know if you are on track when saving for retirement. She said: 'Take time to check what is going in and see if you can afford to boost the contribution. Even small increases over time can make a big difference. 'If you can't afford to pay more in right now then it's worth checking back next time you get a pay increase or a new job.' Check how much your employer will match your pension contributions, she advises. 'Not taking the time to check can see you miss out on money,' she said. 'Some employers will operate what is known as a matching contribution, where they will boost their contribution if you boost yours. 'This can mean a lot more goes into your pension with only a relatively modest uplift from you.' Make sure you track down missing pension pots you may have lost when you changed job or address. Around three million pensions have been lost, according to the Pensions Policy Institute. Helen said: 'Even relatively small pensions can grow over time, and you could be missing out on thousands of pounds. 'If you think you've lost track of a pension then contact the government's Pension Tracing Service.' Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
Daily Mirror
3 days ago
- Business
- Daily Mirror
HMRC set to issue record number of tax bills - see who will be affected
Tax office will issue 1.4 million simple assessments for the 2024-25 tax year, a rise of 80,000 from the previous year - a specialist warns that these tax bills will "catch pensioners off guard" HM Revenue & Customs (HMRC) is poised to send out a record number of unexpected bills this year, as increasing numbers of pensioners find themselves caught in the tax system. The tax authority revealed it will dispatch 1.4 million simple assessments for the 2024-2025 tax year, representing an increase of 80,000 from the previous year's 1.32 million. This result is the highest figure ever recorded and nearly twice the typical annual total over the past seven years. A simple assessment will serve as the method for collecting tax, without demanding the taxpayer fill out a self-assessment form - which is commonly employed for pensioners or workers who have underpaid tax. This follows news of ' thousands of Brits to get shock letter from HMRC after drastic new tax rule comes into force '. HMRC has previously stated that a primary driver behind the growing number of simple assessments was the freezing of income tax thresholds, which has ensnared more pensioners within the tax framework. Specialists have cautioned that these tax bills "catch pensioners off guard" and that retirees have fallen victim to the threshold freeze, which is scheduled to continue until at least 2028. Whilst income tax thresholds have remained static despite inflation, the state pension "triple lock" has boosted retirees' weekly income, resulting in millions more being pulled into the tax system – or elevated tax bands. The majority of retirees also draw income from private pensions, meaning their owed tax is deducted automatically through their tax code. Nevertheless, those lacking private pensions may receive a simple assessment tax bill. HMRC data reveals a sharp increase in the number of taxpayers being automatically assessed for underpaid tax over the past four years. In 2021-2022, the year when income tax thresholds were frozen, HMRC issued 675,000 simple assessments, which is less than half the current figure. The tax office issues a simple assessment when it believes the calculation is straightforward, often where it holds enough information about a taxpayer's income. And whilst these assessments are intended to streamline tax collection, their growing use partly reflects the increasing number of pensioners being drawn into the tax system. Jon Greer, from wealth management firm Quilter, commented: "Simple assessment letters are a prime example of the consequence of stealth taxes in action". He added that "much of this rise is down to how frozen tax thresholds and higher state pensions are creating more tax liabilities for older people". Greer stated that "a lot of these people will not even be aware that they may owe some sort of tax on their income and can catch many off guard". Sir Steve Webb, a former pensions minister and now Partner at pension consultants LCP, claimed: "These figures highlight another casualty of the long-term freeze of personal tax thresholds. With every passing year, more and more pensioners on modest incomes are being dragged into the income tax net". He shared that, "with thresholds being frozen for years to come, more retired people will have to deal with this process in future". Separate figures released by HMRC reveal that the total number of claims for overpaid tax on pension withdrawals has now exceeded 500,000 since "pension freedoms" rules were brought in during 2015. The shake-up, which permitted savers to withdraw ad-hoc sums from their pensions, resulted in them being hit with an emergency rate, with HMRC's systems presuming a one-off withdrawal would be replicated monthly. This saw hundreds of thousands of pensioners overpaying as a consequence, with nearly £1.5 billion clawed back by retirees who were overtaxed. A Treasury spokesman promised: "We are committed to help our pensioners live their lives with dignity and respect, which is why in April the basic and new state pension increased by 4.1 pc". They also claimed that "pensioners will receive a boost of up to £470 to their income in 2025-26" - their "commitment to the triple lock mean[ing] millions will see their pension rise by up to £1,900 this parliament".
The Independent
09-06-2025
- Business
- The Independent
‘Lessons to learn' from winter fuel payments U-turn
The Government's decision to reinstate winter fuel payments for millions of pensioners has been welcomed, but commentators said there are lessons to learn from the U-turn. Nine million pensioners will receive the payments this winter as pensioners in England and Wales with an income of £35,000 or less per year benefit. The payments were previously linked to pension credit, with the Government arguing this would help to balance a 'black hole' in public finances. Jon Greer, head of retirement policy at wealth manager Quilter, said: 'While restricting payments to those on pension credit may have appeared fiscally responsible, it underestimated both the administrative burden and the strength of feeling such changes provoke among pensioners.' He added: 'The lesson here is that if Government wants to better target support, it must do so with careful planning, adequate resourcing and a clear communication strategy. 'It also throws into sharp relief the growing tension around the state pension triple lock (which is used to increase the state pension). 'There is a strong case to say the triple lock is no longer fit for purpose, yet this episode has shown just how radioactive any attempt at reform has become.' SNP Westminster leader Stephen Flynn MP said: 'This screeching u-turn was inevitable and lessons must be learnt from the damaging mess the Labour Government caused by robbing pensioners of their winter fuel payments.' In a video posted on X, consumer champion Martin Lewis said: 'Do I think this is an improvement? Spoiler, yes, very much so.' He added that the previous threshold set last winter was 'just far too low and left many people on still very low incomes earning just above the threshold missing out'. He said moving it to £35,000 'which is much more equivalent to average income is a big improvement and should lead to three in four state pensioners getting a payment, according to the Government numbers. So yes, that's worthwhile.' Mr Lewis said that pension credit had long been under-claimed, 'so linking winter fuel payments to pension credit was in my view flawed. 'And even now, there are 700,000 eligible state pensioners on very low incomes who should be getting pension credit who don't, which also means they miss out on winter fuel payment. 'Well that's gone, because now every state pensioner household will get this by default unless they choose to opt out of it, which means those vulnerable households who are least likely to act will automatically get it.' Mr Lewis said the move means: 'Far more pensioners who were struggling with still high energy bills will get this payment. 'I feel relieved, that's my instant reaction to the news.' Unison general secretary Christina McAnea said: 'This is the right thing to do. The Government acknowledges it made a mistake. 'Restoring the fuel payment to all but the wealthiest pensioners will make a huge difference to anyone who struggled to keep warm last winter.' Sarah Coles, head of personal finance, Hargreaves Lansdown, said: 'The partial u-turn on the winter fuel payment will make a huge difference to the finances of some of the lowest-earning pensioners, who had missed out by a hair's breadth by earning fractionally too much to qualify for pension credit.' Independent Age chief executive Joanna Elson said: 'Our helpline receives thousands of calls from older people making drastic cutbacks just to get by and the changes to the winter fuel payment made this worse. 'For millions living on low incomes, the entitlement supports them to turn their heating on and stock up on food during the colder months.' Caroline Abrahams, charity director at Age UK, said: 'At Age UK we heard from many through the winter who were so frightened about their bills that they didn't even try to keep their homes adequately warm.' Chancellor Rachel Reeves said the Government had 'listened to people's concerns' about the decision to limit the payment last winter.
Scottish Sun
02-06-2025
- Business
- Scottish Sun
How to boost your state pension for free with 1% trick and get £700 extra a year
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) SOON-TO-BE retirees can boost their state pension for free and get up to nearly £700 extra a year with a simple trick. Many apply for the state pension as soon as they reach the eligible age of 66 (which will rise to 67 by the end of 2028), but if you delay your claim, you could get higher payments. Sign up for Scottish Sun newsletter Sign up 1 Soon-to-be retirees could boost their state pension Credit: Getty You can get an extra 1% for every nine weeks that you delay your claim. That means that for every year you delay, you boost your payout by just under 5.8 per cent. 'Deferring your state pension can be a sensible option if you don't need the income immediately and want to boost the payments you receive later in retirement,' said Jon Greer from the investment platform Quilter. How much will you get? The full new state pension is worth £230.25 a week. That means that over the full 2025-26 tax year, you could boost your payments by about £13.35 a week, which is about £694.20 a year, according to Quilter. These figures are based on the current state pension amounts, but as this increases each year thanks to the triple-lock, the actual amounts you add are likely to be higher. The boosted amount increases each year based on the Consumer Price Index. You may want to consider deferring your state pension if you don't urgently need it, such as if you are still in work. Deferring your pension also has tax benefits, said former pensions minister Steve Webb, who now works at the pensions consultancy LCP. 'Drawing a pension alongside a wage can mean a lot more of your pension is taxed - even potentially at a higher rate - than if you wait until your earnings have stopped.' However, there are risks to consider, said Tom Selby from the investment platform AJ Bell. He said: 'If you die earlier, you might not recoup the state pension income you gave up in return for the increase, so if you have health issues then deferral might not be the best option.' Deferring the state pension could be a big mistake for those eligible to claim Pension Credit - which is a handy benefit worth up to £3,900, which also unlocks the Winter Fuel Payment, worth up to £300. Martin Lewis reveals nearly 800,000 Brits could claim hundreds in free cash - here's how to apply That's because your boosted state pension payments could tip you over the threshold for Pension Credit, which is £227.10 if you are single, or a joint income of £346.60 if you have a partner. If you get the full new state pension, you are already over this threshold. It would take about 17 years to make back a year of the state pension payments lost by deferring, although this does not factor in future state pension rises. Who is eligible? Most people can defer their state pension, but there are some exceptions. Time spent in prison or when you or your partner get certain benefits does not count towards the nine-week deferrals. You cannot build up extra State Pension during any period you get: Income Support Pension Credit Employment and Support Allowance (income-related) Jobseeker's Allowance (income-based) Universal Credit Carer's Allowance Carer Support Payment Incapacity Benefit Severe Disablement Allowance Widow's Pension Widowed Parent's Allowance Unemployability Supplement You cannot build up extra State Pension during any period your partner gets: Income Support Pension Credit Universal Credit Employment and Support Allowance (income-related) Jobseeker's Allowance (income-related) The rules are different if you reached your state pension age before April 6, 2016. Instead of a 1% increase for every nine weeks you delay, you get 1% for every five weeks that you don't claim, and you will be given a choice over how to receive your boosted state pension amounts. You can either choose to get higher weekly payments, or you can opt for a one-off lump sum (although this is only an option if you deferred for at least 12 months in a row). The lump sum payment also includes interest of 2 per cent above the Bank of England base rate, which would be 6.25 per cent. If you choose to get a lump sum fixed payment, consider putting it in a high interest savings account. If you're planning on not touching your state pension until at least another five years, consider investing it to make your money work as hard as you can. How to delay You don't need to do anything to delay your state pension - you simply just don't claim it. When you want the money, you can make a claim on the website. The Department for Work and Pensions will then add the boosted amount onto your payments. The DWP should send you a letter no later than two months before you reach state pension age explaining how to claim it.
The Sun
02-06-2025
- Business
- The Sun
How to boost your state pension for free with 1% trick and get £700 extra a year
SOON-TO-BE retirees can boost their state pension for free and get up to nearly £700 extra a year with a simple trick. Many apply for the state pension as soon as they reach the eligible age of 66 (which will rise to 67 by the end of 2028), but if you delay your claim, you could get higher payments. 1 You can get an extra 1% for every nine weeks that you delay your claim. That means that for every year you delay, you boost your payout by just under 5.8 per cent. 'Deferring your state pension can be a sensible option if you don't need the income immediately and want to boost the payments you receive later in retirement,' said Jon Greer from the investment platform Quilter. How much will you get? The full new state pension is worth £230.25 a week. That means that over the full 2025-26 tax year, you could boost your payments by about £13.35 a week, which is about £694.20 a year, according to Quilter. These figures are based on the current state pension amounts, but as this increases each year thanks to the triple-lock, the actual amounts you add are likely to be higher. The boosted amount increases each year based on the Consumer Price Index. You may want to consider deferring your state pension if you don't urgently need it, such as if you are still in work. Deferring your pension also has tax benefits, said former pensions minister Steve Webb, who now works at the pensions consultancy LCP. 'Drawing a pension alongside a wage can mean a lot more of your pension is taxed - even potentially at a higher rate - than if you wait until your earnings have stopped.' However, there are risks to consider, said Tom Selby from the investment platform AJ Bell. He said: 'If you die earlier, you might not recoup the state pension income you gave up in return for the increase, so if you have health issues then deferral might not be the best option.' Deferring the state pension could be a big mistake for those eligible to claim Pension Credit - which is a handy benefit worth up to £3,900, which also unlocks the Winter Fuel Payment, worth up to £300. Martin Lewis reveals nearly 800,000 Brits could claim hundreds in free cash - here's how to apply That's because your boosted state pension payments could tip you over the threshold for Pension Credit, which is £227.10 if you are single, or a joint income of £346.60 if you have a partner. If you get the full new state pension, you are already over this threshold. It would take about 17 years to make back a year of the state pension payments lost by deferring, although this does not factor in future state pension rises. Who is eligible? Most people can defer their state pension, but there are some exceptions. Time spent in prison or when you or your partner get certain benefits does not count towards the nine-week deferrals. You cannot build up extra State Pension during any period you get: Income Support Pension Credit Employment and Support Allowance (income-related) Jobseeker's Allowance (income-based) Universal Credit Carer's Allowance Carer Support Payment Incapacity Benefit Severe Disablement Allowance Widow's Pension Widowed Parent's Allowance Unemployability Supplement You cannot build up extra State Pension during any period your partner gets: Income Support Pension Credit Universal Credit Employment and Support Allowance (income-related) Jobseeker's Allowance (income-related) The rules are different if you reached your state pension age before April 6, 2016. Instead of a 1% increase for every nine weeks you delay, you get 1% for every five weeks that you don't claim, and you will be given a choice over how to receive your boosted state pension amounts. You can either choose to get higher weekly payments, or you can opt for a one-off lump sum (although this is only an option if you deferred for at least 12 months in a row). The lump sum payment also includes interest of 2 per cent above the Bank of England base rate, which would be 6.25 per cent. If you choose to get a lump sum fixed payment, consider putting it in a high interest savings account. If you're planning on not touching your state pension until at least another five years, consider investing it to make your money work as hard as you can. How to delay You don't need to do anything to delay your state pension - you simply just don't claim it. When you want the money, you can make a claim on the website. The Department for Work and Pensions will then add the boosted amount onto your payments. The DWP should send you a letter no later than two months before you reach state pension age explaining how to claim it. How does the state pension work? AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046. The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age. But not everyone gets the same amount, and you are awarded depending on your National Insurance record. For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings. The new state pension is based on people's National Insurance records. Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension. You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit. If you have gaps, you can top up your record by paying in voluntary National Insurance contributions. To get the old, full basic state pension, you will need 30 years of contributions or credits. You will need at least 10 years on your NI record to get any state pension.
