Latest news with #RoyalLondon
Telegraph
14 hours ago
- Business
- Telegraph
Families rush to take out life assurance ahead of Reeves's inheritance tax raid
Rachel Reeves's inheritance tax changes have sparked a scramble for life assurance as people seek financial security for their families, experts have warned. In her maiden Budget, the Chancellor introduced a £1m cap on business and agricultural property relief from next year, and will move pensions into consideration for inheritance tax from April 2027. Insurance broker, LifeSearch, said sales of whole life cover, also known as life assurance, have increased by 230pc since last autumn, while major providers, Royal London and VitalityLife, also reported surges in enquiries. One expert said the Budget had created 'a real problem' for inheritance tax planning, while another said business owners and farmers were now pursuing life cover for the first time. When she delivered her Budget last October, the Chancellor confirmed new inheritance tax rules for business owners, farmers and unspent pensions. In the event of the owner's death, inheritance tax will now be charged on 50pc of the value of business or agricultural assets above £1m from April 2026. Pensions will also be considered for 40pc inheritance tax 12 months later – leaving some families facing an effective tax rate of over 90pc. Experts said the changes had led to an increase in life assurance policies. These are more expensive than life insurance policies because they pay out regardless of when death occurs, so they are often purchased to cover future inheritance tax bills. James Robinson, of advisers Forvis Mazars, said: 'The Budget has created a real problem for people thinking of their pensions or business as being inheritance tax efficient. 'Almost all of our clients want to talk about the inheritance tax changes in some way. We saw a steady increase in the run-up to the Budget and since then, we've seen a marked increase in these conversations. 'It's more of a shock for business owners. They will need to figure out how they fund this tax charge and whether this could affect original plans for the business. It could create a risk for how the business continues in the right way and in the right hands if a proper plan isn't put in place by the time the changes take effect.' Alan Richardson, of LifeSearch, said the Chancellor's changes had also led to business owners and farmers starting to take out policies. He said: 'For the first half of our financial year, which started in September, we've seen a 230pc increase in whole of life policies for the purpose of inheritance tax. 'Before the Budget was announced, we never got a business or a farm owner phoning us up to talk about inheritance tax liabilities, but we do get that now. 'It's also interesting that the average age of people asking for whole of life has dropped off. Historically, it's been 60 to 63, but we're getting younger people now asking about inheritance tax.' Many insurers sell their life products directly to customers, but then cover their risk with larger global companies, known as reinsurers. One such multinational reinsurer, Gen Re, reported an 18pc increase in its sales of whole of life policies during the first three months of 2025 compared to the same period last year. Kevin Carr, a financial services specialist and former independent financial adviser, said this was due to the Budget. He said: 'Gen Re's data shows a substantial increase in the take up of whole of life insurance in the UK, which is no doubt related to last year's Budget and the pending inheritance tax changes. 'It's not driving the mass market, which is people buying it for their mortgage at £20 a month, but I certainly know lots of advisers that specialise in the market where people want to cover their inheritance tax liability and they've been incredibly busy since the Budget. 'People are looking at the changes, seeing an even larger bill than they'd expected and are taking steps to provide for their loved ones.' Major UK insurers also confirmed they were being approached more often. Royal London revealed a 50pc increase in quotes for protections linked to inheritance tax, while VitalityLife also said it had seen more people looking for and buying life insurance.
Times
5 days ago
- General
- Times
The NHS has a vaccine problem: staff don't want the jab
Doctors, nurses and other frontline NHS staff are shunning the flu vaccine in ever-greater numbers, with almost nine in ten staff at one of England's largest hospital trusts unvaccinated last winter. Barts Health Trust, which has more than 18,750 staff working in six hospitals in east London, had the worst results in England, managing only 12.9 per cent, or 2,416, frontline staff getting vaccinated. This includes nurses and doctors working at the Royal London in Whitechapel, a major trauma centre treating some of the most seriously injured and sick patients in the capital. The dire take-up is symptomatic of a problem on NHS wards across England. New data shows the number of NHS staff getting the seasonal flu vaccine over winter has crashed to 37.5 per cent — its lowest level in almost 15 years. This year's drop of 5.3 percentage points is the fourth consecutive year that vaccination rates have fallen since the pandemic. The flu vaccine is essential to prevent widespread sickness in hospitals. A bad flu season can lead to tens of thousands of deaths, particularly in elderly patients and those already ill with other conditions. More than 22,500 excess deaths were linked to flu in the winter of 2017-18. An outbreak can also lead to staff shortages, cancelled operations and put patients at risk of being infected by staff who are meant to be caring for them. The rapid fall is another sign of the wider phenomenon of 'vaccine fatigue' that is being blamed for a rapid decline in vaccinations, including those designed to protect children from deadly diseases such as measles. The UK Health Security Agency said there was also complacency about the threat of some diseases and the agency was working to make sure parents were educated about the risks of not vaccinating their children. Last week, it emerged efforts to eradicate cervical cancer in England by 2040 were at risk of being derailed because of a crash of 17 percentage points in children getting vaccinated against human papillomavirus, or HPV. 'The number of NHS staff getting vaccinated is very low, it is worrying,' said Heidi Larson, a professor of anthropology and founding director of the Vaccine Confidence Project at the London School of Hygiene and Tropical Medicine. It tracks public sentiment towards vaccines and has been running since 2010. • Pharmacies running out of flu vaccine as NHS restricts free jabs Larson said vaccine fatigue and wider falls in vaccination rates were being seen globally but particularly in Europe and western nations. 'It's a mix of things going on,' she said. Since the pandemic, people had reacted against a sense of being controlled and forced to have jabs. 'A lot of people were kind of bullied, almost, in a positive sense, to get the first Covid dose in the UK. It was very successful but there was this sense of control and people have said in our studies they resented taking that vaccine. Some people, maybe subconsciously, are angry about having been pushed into taking them. They feel enough is enough towards vaccines. What I see is a sort of societal PTSD and within that some people are now saying they won't get vaccinated as a reaction.' The pandemic had also made more people aware of vaccines and the science behind them and prompted more people to go online where, Larson said, they were confronted by 'toxic information'. Urgent action was needed to reverse the decline but she warned the NHS and government against a 'top-down command and control campaign', which could make matters worse. Instead, more nuanced conversations using peer influencers and community leaders were needed. According to the UK Health Security Agency's official statistics, released last month, 37.8 per cent of frontline health workers across hospitals and GP practices had a flu vaccination between September and February. This is the lowest since 2010-11 when 35 per cent of staff were vaccinated. • Treat the sickest and forget targets, Wes Streeting tells NHS GP surgeries managed more vaccinations — with 52 per cent of staff getting the jab — but this was down 10 per cent on the year before. Among staff groups, doctors were the most vaccinated but still achieved only 42 per cent. Only 38 per cent of nurses had the vaccine and the lowest level was among support staff, with 34 per cent. During the winter, almost 75 per cent of over-65s had a flu vaccine. The number of people with longer-term health conditions being vaccinated fell to 40 per cent. Similar falls were seen in primary school children and toddlers but coverage among secondary school children hit almost 45 per cent — the highest yet. More than 7,750 deaths were linked to flu in 2024-25, double the number the year before. London, as a region, had the lowest vaccination rate at 31 per cent but this was more than double the performance of Barts Health Trust. One senior consultant at Barts Health Trust, who had the jab, said they were shocked at the results and blamed apathy by some staff. They said: 'I had mine from a vaccine champion who visited different clinical areas to vaccinate staff.' Managers needed to do better, they said, adding: 'They should be spending summer finding out why staff didn't get it, rather than just doing the same again next winter.' Caroline Alexander, chief nurse at Barts, said: 'We understand that vaccine fatigue and hesitancy is a real concern for staff. While this challenge is not new and was heightened during the pandemic, we have been actively working to address it through a targeted communications campaign in collaboration with NHS England aimed at dispelling myths and building trust around vaccines.' She said the trust had offered mobile clinics and drop-in sessions in hospitals and sent trained vaccinators to wards and departments. Before next winter the trust would be highlighting the dangers of not having the flu vaccine. The best-performing trust was South East Coast Ambulance Trust, which managed a vaccination rate of 74 per cent. A spokesman there said it had a proactive campaign with vaccinators visiting workplaces with incentives such as 'free coffee for a jab'. It also used real-time data to track who had been jabbed to help target staff and teams with low uptake levels. Other problems include hesitancy by black and minority ethnic staff and communities towards vaccines. The NHS has also scrapped payments made to hospitals for encouraging more staff to have jabs. • Combined flu and Covid vaccine could be ready by this winter Those eligible for a free jab include all over-65s and any adult with specific risk factors such as diabetes. Pregnant women are also eligible along with schoolchildren and residents in care homes. The jabs are changed each year to reflect which viruses are dominant. This year the vaccine protected against four types of influenza. A vaccine cannot give you flu and is generally considered safe and effective. People can suffer mild reactions and side-effects but serious complications are extremely rare. The NHS has included messages on staff pay slips to try to increase vaccinations as well as working with medical colleges to design better messaging for staff groups. Sir Stephen Powis, the NHS England medical director, said: 'NHS trusts have a mandatory obligation under the NHS standard contract to make a flu vaccine offer to 100 per cent of their frontline staff every year.'
Irish Times
27-05-2025
- Business
- Irish Times
Is investing (finally) getting cheaper in Ireland?
There was a bit of a stir in the financial advice community when Royal London arrived in the Irish pensions market. The UK mutual insurance society had been active in the Irish protection market for many years, when it decided to broaden its reach last November, launching a PRSA as part of its burgeoning Irish pensions business. So why the stir? The new entrant opted to publish its pricing structure on its website, with access for all – and some competitive charges. It has brought a welcome dose of transparency to a market that savers have often found tricky to navigate, given the myriad charges that can apply. It's not a perfect outcome; the taxation system around investing in Ireland still needs to be updated, while costs are still less competitive than elsewhere. But, thanks also to the arrival of new online players, which often offer a more cost-effective product, competition is finally beginning to crunch. READ MORE 'It's only the start,' says David Quinn, managing director of Investwise. This is good news for investors. Status quo Many Irish investors make their first move into the markets via a life-wrapped product sold through a bank, a life company or a financial adviser. The advantage of such products is that tax, via the gross roll-up system, is taken care of for you. So, no filing reports with Revenue. The downside, however, is that investing this way can be expensive. Contrast Irish Life's Indexed Ethical Global Equity fund with Blackrock's iShares MSCI World Screened. Both track the MSCI World ESG Screened Index – but have different charges. The iShares fund has a total expense ratio of just 0.2 per cent: Irish Life's fund has a fee of 0.75 per cent. And it's not always clear what the full extent of charges on Irish funds are, as we don't have a total expense ratio (TER) or total cost of ownership approach. 'Costs were opaque, with the cost of advice, administration and investment management all built into one single annual fee,' says Quinn. And, given how financial advice works in Ireland, where advisers can still be paid under the commission model (the UK banned this in 2012), the total costs of these products are not always clear. 'This annual fee often includes an upfront commission payment to the sales adviser,' says Quinn, adding that the annual cost of such a fund is about 1.5 per cent. As he notes, there can be further 'hidden' costs in a fund, which are not always required to be disclosed under regulatory rules. These can be as high as 0.5 per cent, bringing the total cost closer to 2 per cent per annum. That's a hefty deduction from any possible gains your fund might make. New options But, the tide might be turning. In 2022 Royal London, which already has a protection business in Ireland, became the first new pension provider to enter the market in more than a decade – and the first life assurance company in more than 30 years. It first brought approved retirement funds (ARFs) and a personal retirement bond to the market and then, last year, launched a PRSA . And it's just the first step. 'There are lots of exciting plans for the future as we plan to grow this side of the business,' says Noel Freeley, chief executive of Royal London Ireland. Quinn says Royal London's 'aggressive pricing' has put some of the other providers under pressure. Royal London now offers ARFs and PRSAs in the Irish market, with annual fees as low as 0.35 per cent (remember financial advice fees will also apply, as this is the wholesale price, and it applies on savings above a certain level). Royal London also offers its customers a value share. 'It's an additional boost that may be added to customers' fund returns in years that the company does well,' says Freeley. 'Though not guaranteed to be awarded every year, once awarded, it belongs to the customer and can never be taken away. 'In April 2025, value share was awarded for a third year in a row.' This year, it was paid out at a level of 0.13 per cent, thus driving down annual costs to just 0.22 per cent. 'It's unbelievably competitive,' says Quinn. While 'you can't bank on the value share', as it is a discretionary payment, it has been 'fairly consistent' in recent years, he says. Not only that, but Royal London also put its charging structures on its website; typically such payments are hidden behind broker-only access areas. They show ARF charges of 0.4-0.9 per cent, depending on the assets in the fund. According to Freeley, transparency is important to the company. 'Our research identified key areas that were important to customers, such as perceived affordability, which was the main reason for people not having a pension at the time. Therefore, pricing and transparency on fees and charges was important,' he says. More competition It's putting pressure on other providers to be more competitive. Irish Life, for example, is understood to have recently cut charges for underlying contracts taken out on its Portus platform by 10 basis points – that is, from 0.5 per cent to 0.4 per cent. And, as Quinn notes, the move towards cheaper index funds has made it clearer for investors that they may, in certain circumstances, be overpaying. This has also put product providers under pressure to keep costs down. 'People are more cost conscious,' he says. Indeed, a spokeswoman for Aviva says that while it has not cut retail charges of late, it has launched a 'number of lower-cost passive investment options for consumers' to complement its existing range of active funds. Revolut says you can invest €1,000 in the iShares S&P 500 UCITS for a total cost of just €0.73 after a year. Photograph: Justin Tallis/AFP via Getty New players The incumbent players are also facing a wave of new competition from the likes of Revolut, Interactive Brokers and deGiro. These offer low-cost access to a range of investments, such as exchange-traded funds and shares. For example, Revolut says you can invest €1,000 in the iShares S&P 500 UCITS for a total cost of just €0.73 after a year (based on growth of 7 per cent, and a TER of 0.07 per cent). Such investments are typically bought on an execution-only basis, which means investors won't benefit from financial advice – but nor will such fees apply. And, while tax can be an issue, particularly when it comes to ETFs and deemed disposal, change might be coming on this front. Last October, then minister for finance Jack Chambers published the latest communication in a possible reframing of taxes in the investment fund sector. As pointed out numerous times in the consultation process, the Irish system for taxing investments is inconsistent and off-putting for investors. [ Investors still face wait for overdue Irish ETF tax reforms Opens in new window ] There is a growing expectation that changes will be announced in this year's budget, after they were included in the 2025 programme for government. According to a spokesman in the Department of Finance , officials are 'reviewing options for measures that could be taken to assist with retail participation in capital markets', taking into account developments at an EU level in respect of the Savings and Investments Union. Making the investment landscape more tax-efficient should mean ETFs that are easier to account for and cheaper – and bring about another wave of much needed competition for beleaguered investors.
Telegraph
18-05-2025
- Business
- Telegraph
Money Purchase Annual Allowance: What is the MPAA and what does it mean for your pension?
If you want to dip into your pension before you've stopped saving or really retired, it's important that you are aware of the Money Purchase Annual Allowance (MPAA) and the impact it will have on your future contributions. Here, Telegraph Money explains what the MPAA is and how it could restrict your ability to grow your pension as retirement approaches. What is the money purchase annual allowance? How does the money purchase annual allowance work? What triggers the money purchase annual allowance? Pension allowance vs MPAA Why it's important to think about the MPAA Managing your pension after triggering the MPAA FAQs What is the money purchase annual allowance? Each year, it's possible to pay 100pc of your earnings, up to £60,000 a year, into your pension and get tax relief on your contributions. However, once you have made a taxable withdrawal from your pension, this allowance is slashed to just £10,000 a year. Clare Moffat, pensions and tax expert at Royal London, explains: 'Since the introduction of 'Pension Freedoms' a decade ago, pension savers have been able to take as much or as little as they want out of their pensions from age 55, instead of buying an annuity. 'To prevent people from repeatedly taking money out, benefiting from tax-free cash, and putting money back in again with the benefit of tax relief, HMRC introduced a limit on the amount people could invest back in to pensions once they had started drawing taxable cash. This is called the Money Purchase Annual Allowance (MPAA).' How does the money purchase annual allowance work? The MPAA limits the amount that you can pay into your pension and still get tax relief on your contributions, once you have made a taxable withdrawal from a defined contribution pension (also known as money purchase schemes). Charlene Young, senior pensions and savings expert at AJ Bell, says: 'The MPAA is now set at £10,000 per tax year and once triggered it applies to all money paid into money purchase pensions – which include Sipps and personal pensions, but not defined benefit schemes. 'The reduced allowance covers your total pension savings in these pensions for a year – that's your personal contributions, including tax relief, plus those by your employer or anyone else.' She adds: 'Anything above £10,000 is taxed at your marginal rate – meaning it is added to your other income for the year to work how much tax you'll pay. If you trigger the MPAA part way through a tax year, anything paid in before this date is not caught. But once triggered, you'll be unable to carry forward unused allowance from previous years to increase the £10,000 allowance for your money purchase pensions.' Non-earners, those with incomes below the personal allowance, are limited to contributing £2,880 a year – which will be boosted to £3,600 once basic rate tax relief has been applied. Your pension provider will tell you if you are making a withdrawal that triggers the MPAA and, if you proceed, you will get written confirmation within 31 days. Once triggered, the MPAA is permanent – you cannot revert to the standard pension allowance in future tax years. What triggers the money purchase annual allowance? Andrew King, of wealth manager Evelyn Partners, says the MPAA will kick in when you access your pension 'flexibly'. This includes the following scenarios: Taking an uncrystallised fund pension lump sum or a standalone lump sum (not tax-free cash) Taking an income payment from most drawdown plans set up after April 5, 2015 Receiving an income from a flexible annuity (a fixed-term annuity that pays out for a specific period like five or 10 years) Receiving an income payment from a small scheme pension with 12 members or fewer Taking an income payment from a drawdown payment that was converted to flexible drawdown after April 5, 2015 Having flexible drawdown before April 6, 2015 Exceeding the income limits from a capped drawdown plan set up before April 6, 2015 What won't trigger the MPAA? Mr King adds that the following circumstances wouldn't trigger the MPAA: Taking income from a defined benefit or final salary pension Taking a pension arrangement as a small lump sum due to it being worth less than £10,000 Taking income from capped drawdown set up before April 6, 2015, which remains within capped drawdown limits Taking tax-free cash only and no income Taking a pension as an annuity Pension allowance vs MPAA Pension allowance The maximum you can pay into a pension is usually 100pc of earnings up to £60,000 a year The pension allowance ceases to apply once a flexible withdrawal has been made 'Carry forward' rules allow you to used unused allowance from the previous three years MPAA The maximum you can pay into a pension is £10,000 a year It's usually triggered once you have made a taxable withdrawal from your pension You can no longer take advantage of carry forward rules once you have triggered the MPAA. Why it's important to think about the MPAA According to research from Royal London, around one-third of people between the ages of 55 and 64 have accessed their pensions flexibly and triggered the MPAA. But Moffat warns savers to think about the impact triggering the MPAA will have on your ability to keep paying into your pension. She says: 'The changing shape of retirement means workers are now less likely to have a hard stop to the world of work, preferring to transition gradually into retirement. This makes the MPAA an important consideration for nearly half of workers planning to gradually retire by reducing their working hours, making it likely that many will come up against the MPAA if they want to start paying more into pensions again.' However, she says that there are ways to avoid triggering the MPAA and protect your full pension allowance. 'If you are still working but you want to go on holiday or make a bigger purchase, like a new kitchen or car, then taking a small pot which is less than £10,000 – or only taking tax free cash and moving the rest into drawdown – means that you won't trigger the MPAA. 'For many people, their 50s are the point that they are earning the most and able to pay more into pensions, so triggering the MPAA could limit pension contributions and that could mean that you might not have the retirement that you planned.' Managing your pension after triggering the MPAA Mr King says that once you have triggered the MPAA, you will need to take care to ensure that you do not contribute more than £10,000 a year into your pension. 'This could be problematic if you have retired early, taken your pension and then triggered the MPAA, and then you return to work in a high paying job, which comes with a salary and pension contributions which exceed £10,000 per annum. In this instance, you would have to tell your new employer to cap total contributions at £10,000 or face the tax charge.' Your pension provider will tell you when you make a withdrawal that triggers the MPAA. However, it will be your responsibility to inform other pension providers you have pots with and any new providers. FAQs What happens if you exceed the MPAA? If you exceed the MPAA you will not get the benefit of tax relief on that money – instead it would be added to your income for the year and taxed at your highest rate. You will normally need to complete a tax return to declare and pay the charge. How do I find out if went above the MPAA? If you aren't sure how much has been paid into your defined contribution pensions during the tax year, you can contact each of your providers. If the total – including employer contributions and tax relief – exceed the MPAA, you will need to pay a tax charge. There is also a calculator on the government website that can help you work out if you have a tax charge. If you are taking money out of a small pension – worth £10,000 – or less, you won't trigger the MPAA. This means that if you want to take money out of a pension, while you are still contributing, it's worth turning to any small pots you might have first.
The Sun
17-05-2025
- Business
- The Sun
The £1 pension trick that could save you thousands on your tax bill
A CLEVER £1 pension trick could stop you from losing thousands in emergency tax when withdrawing from your pension. Across the UK, many over-55s are at risk of overpaying tax when they take out lump sums from their pensions. 2 In just the first three months of 2025, pensioners reclaimed a staggering £44 million in overpaid tax, according to HMRC. That's an average of nearly £3,000 per person. This happens because when people take out money from their pension for the first time, HMRC doesn't always have an accurate tax code for them. So instead, it applies an emergency tax, assuming the amount withdrawn will be repeated every month for the rest of the year. The result? You can end up paying much more tax than you actually owe. For example, someone taking out £20,000 might be taxed over £7,000, when they should really only pay around £1,500. The extra money can be claimed back, but it often takes months and requires filling in complicated forms. That's where the £1 pension trick comes in. By withdrawing a small amount first, as little as £1 in some cases – HMRC is prompted to issue an up-to-date tax code. Once that code is in place, any further withdrawals are taxed correctly from the start. Pensions expert Clare Moffat, from Royal London, told the Express that the exact amount needed varies depending on the pension provider. 'It could be £1, £50 or £100 – but the idea is to make a small withdrawal first to get a tax code sorted before taking a large sum,' she said. Some providers allow £1 withdrawals online, but others may require a paper form. It's worth checking in advance to avoid delays or confusion. David Gibb, a chartered financial planner, warned that this emergency tax is down to a glitch in the PAYE system. 'It's a hangover from how regular wages are taxed. "But for one-off pension withdrawals, it doesn't make sense – and savers lose out.' The trick isn't perfect. In some cases, even with a tax code, emergency tax may still be applied. But it can significantly reduce how much you overpay and the stress of claiming it back later. If you're planning to take out a lump sum for a big purchase, like a new kitchen, home repairs or a holiday, knowing this trick could keep more cash in your pocket. However, experts also warn to think carefully before dipping into your pension early. Withdrawing taxable income could reduce your pension pot and even trigger the Money Purchase Annual Allowance (MPAA), limiting how much you can pay back in later, from £60,000 a year to just £10,000. This could be a big deal for people in their 50s and early 60s who are still working and putting money into their pensions. It's also important to remember that once you take money from your pension, it may affect other benefits or entitlements, so it's worth getting advice. 2
