Latest news with #pensions
The Sun
16 hours ago
- Business
- The Sun
How to protect your pension after divorce – everything you need to know
DIVORCE is one of the most stressful experiences you can go through in life, not least because of the debate over how to split your finances. While the family home is often given careful consideration, pensions are a vital factor often overlooked. But this can have severe consequences later down the line. Pension savings can be worth hundreds of thousands of pounds, yet, all too often these cash pots get ignored when it comes to divorce, and it's usually women who miss out. Their pension pots are often smaller than men's due to taking career breaks to look after children or working part-time. The oversight costs women more than £77,000 on average when it comes to retirement, according to research by provider Scottish Widows. Yet, more than more than 60% of divorced women didn't go through pension assets during a divorce. Susan Hope from Scottish Widows, says: ' The main reason women still lose out is because they simply are not aware of the potential value and that pensions should be included in the family assets. 'Divorce can be an extremely stressful and intense time. It can be easy for pensions to sink down to the bottom of the priorities, especially if it's a DIY divorce. She added: "Some may prioritise keeping the family home or taking more cash from a sale, but without seeing the full picture.. "This could be at the expense of a fair pension share, so it's important to have the right conversations.' Could you be eligible for Pension Credit? HOW TO DIVIDE A PENSION There are a few different ways to split a pension. It is important to note the value of the pension may be offset against other assets. For example, one person could agree to take a bigger share of the home instead of any of the other person's retirement pot. Or the pension could be shared with an agreed percentage transferred to the former spouse. In this case, it's a clean break, according to Dean Butler of pension firm Standard Life. He adds: 'On the downside, it can be quite complicated to set up and needs an order from the court.' Another alternative is called a 'pension attachment order', which is where one person agrees to pay a portion of their pension income to the other, but only when it starts being paid. Dean says: 'This also requires a court order and the first person retains quite a lot of control of when and how the pension is used, and payments will stop when they die.' WHAT TO DO WITH CASH After a divorce, you should always take stock of how much you'll need for retirement and whether you have enough. Rachel Vahey, head of public policy at AJ Bell, said:'You may find the income you expected to get at retirement has taken a hit. 'Whether your ex-partner kept the bigger proportion of the pension or you shared some of your retirement savings with them, now is the time to think about how to boost your pot.' You can go through a three-step online pension check on the government's website to check if you are on the right track for a comfortable retirement. If you are falling short, look at what your employer can offer. It could be worth upping contributions through a workplace scheme, especially if your employer will match the contribution. Even increasing savings by a small amount can make a big difference in the long term. If you do receive a share of a pension pot, you'll need to think about whether it's in the right place. You could save fees by combining it with any other pensions. Having your cash in a single and bigger pot also makes it easier to manage. CHANGE YOUR EXPRESSION OF WISHES Many people don't realise that pension assets are not usually covered by your will. And if you die before taking a private pension, your provider will then decide where the cash goes. This is usually done based on an 'expression of wishes'. This is a form you'll usually fill out when setting up the savings pot. Crucially, if you gave your spouse's name when you set up the account, you need to remember to change this when you divorce – assuming you no longer want them to receive the benefits. Ed Monk, associate director at savings provider Fidelity International said: 'If your life circumstances change and you're seriously considering ending your marriage or civil partnership.. "It's important to change your expression of wish to reflect any change in who you want to receive your pension payments in the event of your death.' 3 'I would definitely be worse off' By Lana Clements TRACEY Ford, 51, was married for 14 years and initially didn't consider her ex-husband's pensions as part of joint assets. The celebrant from Johnstone, Renfrewshire was mainly focussed on how to take over ownership of the house, when she decided to consult a solicitor on the situation. It was only then that she was made aware that she would be due a portion of his civil service final salary pension. She says: 'I had been self-employed for 25 years so didn't have a workplace pension. 'My ex-husband's pension was a sizable asset that I had completely overlooked until the solicitor pointed it out. 'We then went through a process to set up the appropriate paperwork so I'll receive a portion in the future. 'I would definitely be worse off in retirement had I not taken the pension into account.' Nationwide £100 payout MILLIONS of Nationwide customers are to receive a £100 cash sum over the coming weeks. Around four million will receive a share of £410million as part of Nationwide's Fairer Share programme, which rewards its banking customers. 3 You will need to have opened a current account with Nationwide before March 31. Those with £100 in savings at that time will also see the boon if the account was used within the first three months of this year. And Nationwide mortgage borrowers with more than £100 outstanding qualify, too. The cash will be paid into Nationwide current accounts between June 18 and July 4. Chief executive Debbie Crosbie said: 'Nationwide has had an outstanding 12 months. "We returned a record £2.8billion in value to our members and recorded our highest ever year for growth in mortgage lending and retail deposit balances, and we remain first for customer service.' It comes after Nationwide paid £50 to customers in April and May as part of its 'Big Nationwide Thank You' following the building society's Virgin Money takeover. Those who have been Nationwide members since March 31 can currently get a £200 bonus by switching to Nationwide's FlexPlus, FlexDirect or FlexAccount. An existing member is someone who has held a mortgage, savings account or current account with the company. Cash boost for retired CHANCELLOR Rachel Reeves has announced plans to overhaul the UK pension system, aiming to increase average retiree savings by £6,000. The reforms, part of the forthcoming Pension Schemes Bill, involve consolidating smaller defined-contribution pension schemes into larger 'megafunds'. Assets will be pooled from the 86 separate Local Government Pension Scheme authorities into eight funds by 2030. The Government draws inspiration from successful models in Canada and Australia, where large-scale pension funds have achieved higher returns through diversified investments. By pooling assets, the UK aims to enhance investment opportunities and stimulate economic growth. Each megafund will set specific targets for local investment, potentially securing £20billion for community development. While the reforms promise increased returns and economic benefits, experts warn that the consolidation could overlook the advantages of smaller, well-managed schemes. The Government plans to introduce the Pension Schemes Bill next year, with further consultations to make sure the reforms meet the needs of savers and the economy. The Government says this is a significant shift in the UK's pension landscape, aiming to balance individual retirement savings with broader economic objectives.
Telegraph
21 hours ago
- Business
- Telegraph
Reform to end gold-plated pensions for council workers
Reform UK has unveiled plans to reduce gold-plated staff pensions at the councils it won from Labour and the Tories at the local elections. Richard Tice, the party's deputy leader, said it would take an axe to final salary schemes, describing them as unaffordable and an 'outrage'. Speaking to The Telegraph, he said Reform-controlled authorities would stop offering such generous terms to new recruits. He added that staff on existing contracts would have to accept lower annual pay rises to balance out the huge cost of funding their retirement. Nigel Farage's party won control of 10 councils across England last month, marking its major electoral breakthrough. It did so on a pledge to find huge savings, promising to end local authority focus on diversity and inclusion schemes and hitting net zero targets. 'Country is going bust' Mr Tice is fronting efforts to free up money that could be reinvested in improving services like bin collections or used to freeze council tax. He has identified wasteful and underperforming pension schemes as an area where Reform councils can save hundreds of millions of pounds. 'Whether people like it or not we should not be employing people on defined benefit contribution schemes,' he told The Telegraph. 'It's an outrage – the public can't afford it. It's absolutely ludicrous, and this is why the country is going bust and it's all got to stop. 'We're going to have to go to war with these people. Our job is to wake people up as to where their money is going and why we're all being ripped off.' Mr Tice said under many gold-plated pension schemes councils were having to contribute up to 30 per cent of their officials' salaries. Such final salary schemes are substantially more generous than those in the private sector. He said that if staff are on such terms 'then candidly that has to be taken into account when you look at people's annual pay rises'. 'You look at the overall cost of employment and if they're not prepared to then a whole load of people are going to have to be made redundant,' he warned. 'Councils are going bust all over the country – the country's going bust, and until we've come along no one dared admit it.' Last year it emerged that a quarter of council tax revenue was now being spent on pension schemes that are 'unjustifiably generous'. It means the average household is now contributing £230 a year to the retirement plans of officials who, on average, earn nearly £40,000 a year. Last year local authorities contributed almost £7 billion to staff pension pots, The Times revealed, making them one of their highest costs. Mr Tice said that, as well as the generous contributions, many councils were also investing in 'woke' pension funds that were underperforming. He said Reform would be examining how much money was being put into net zero funds and whether they were making below average returns. The councils controlled by the party could also save upwards of £200 million a year just by renegotiating the investment fees they are charged, he added. 'I can smell the taxpayer being ripped off,' he said. 'Their council tax is being gobbled up by pension fund contributions because they're overgenerous and they've been badly managed for decades.'
Yahoo
a day ago
- Business
- Yahoo
Revealed: the council that spends more on pensions than it collects in tax
Cash-strapped local authorities are spending more than half of their council tax revenue on staff pensions, a Telegraph investigation has found. The Shetland Islands council puts the equivalent of 111pc of its council tax haul into staff pensions, while councils in Hackney, South Oxfordshire, Newcastle-under-Lyme and the Orkney Islands all shell out more than half. Another 19 fork out the equivalent of at least a third of what they take in. Together, the 24 councils have stuffed almost £3bn into staff pensions over the past five years – but still hiked their tax rates by an average of over 7pc for 2025-26. As rates soar to record levels and second home owners are hit with double premiums, Telegraph Money can reveal: 12 Scottish, nine English and three Welsh local authorities now shell out more than a third of their council tax on staff pension contributions – with the total bill exceeding £730m a year. 60 councils spend at least 20pc of what they collect. The Local Government Pension Scheme already pays 2.3 million retirees and another five million current and former workers are building up generous, inflation-linked pensions. It comes after nine in 10 areas across England endured the maximum 4.99pc council tax rise last month, with parts of Scotland and Wales slapped with even higher increases. Local authority funding comes from multiple sources, including government grants, but tax receipts represented more than half of English councils' core spending power last year, according to the Institute for Fiscal Studies. The Local Government Pension Scheme for England and Wales is one of the world's largest funded schemes, with 6.7 million members and £390bn in assets. Scotland's scheme has another 639,000 and assets of £60bn. Together, they pay retirees £15bn a year in inflation-linked, guaranteed pensions for life. Employers pay an average contribution of 19.8pc of salaries for staff pension in England and Wales and 17.5pc in Scotland. Now, following a series of Freedom of Information requests, The Telegraph can reveal the true cost of the generous schemes – and how much of your council tax is used to fund them. Nigel Farage, Reform leader, said: 'For all the talk of debt, for all the talk of interest rates, for all the talk of local, county and national budgets, the real elephant in the room is public sector pensions. 'What is happening is a microcosm of an even bigger national problem. These will present big challenges for Reform in the councils we're in control of.' The Shetland Islands council reported the highest percentage of contributions paid compared to council tax collected with 111pc. Its pension costs of £74.9m over the past five years dwarfed the £67.7m it collected from ratepayers. In March, council officials said the council's major spending commitments and millions in borrowing repayments would lead to cuts to everyday services. Orkney Islands council was also near the top of the list after spending the equivalent of 58pc of council tax. The highest in England was Hackney council, which collected £415.2m in council tax between 2020 and 2024 and paid £243.3m, or 59pc, into staff pensions. It has yet to release its 2024-25 figures, but confirmed in November it would need to make savings of £67m by 2028. South Oxfordshire district council received £43.8m over the past five years, but spent £25.2m, or 58pc. Blaenau Gwent county borough council, at 39pc, was the highest in Wales after taking in £176.9m and spending £68.5m. A total of 60 local authorities have spent more than a fifth of the council tax they collected on pension contributions since 2020-21. Among the 24 that spent over a third, the average council tax increase for 2025-26 was 7.5pc. It ranged from 1.99pc in Newcastle-under-Lyme to 15pc on the Orkney Islands. Birmingham council, which effectively filed for bankruptcy and announced £300m in cuts over two years, spent more than £100m a year, equivalent to 29pc of its council tax. The figures come as homeowners and renters battle soaring council tax rates across the country. Almost half of properties in England now face bills of at least £2,000, while the number of households on the hook for a £5,000 bill has quadrupled. Six councils were also granted permission for exceptional increases by Angela Rayner, with Labour-run councils in Bradford and Newham hiking rates by 9.99pc and 8.99pc respectively. Increases in Scotland and Wales were even higher. Second home owners have also been hit after more than 200 local authorities brought in a 100pc council tax premium from April 1, enabled by rules introduced under the Conservatives. Telegraph analysis found that 2,000 second home owners in popular holiday hotspots could face bills of £10,000 or more across both their residences. The average second home owner will now see their tax bill rise 77pc to £3,672 in 2025-26. John O'Connell, of the TaxPayers' Alliance, said: 'Local taxpayers are fed up with seeing more and more of their cash being used to prop up gold-plated pensions that most could only dream of. 'Households across the country are still reeling from the latest round of council tax rises and authorities are cutting back key services. All the while, those working in local councils are sitting pretty on defined benefit nest eggs that are all but non-existent in the private sector.' Despite the amounts paid in by councils, the Local Government Pension Scheme remained almost £6bn in deficit at its last valuation. Of 87 individual schemes, 26 still didn't have enough money to pay their retirees. There were hopes that councils would be able to cut their contributions following the next round of valuations, due later this year. However, experts fear this is now less likely after Donald Trump's announcement of global tariffs hit investment markets. Andy King, of wealth manager Evelyn Partners, said the 'huge divide' between public and private sector pensions raised questions over affordability and fairness for taxpayers. He said: 'A lot of council tax payers will be surprised at just how much of their continually rising bills go towards funding pensions, rather than into local services. The scheme is hugely more generous than private sector pensions, and local government staff may not know how good it actually is.' A Local Government Association spokesman said: 'The Local Government Pension Scheme [LGPS] can help encourage people to develop a career in local government. With pay often lower in local government than comparable private sector roles, the LGPS can mitigate that while occupational pensions, like the LGPS, can help public sector workers avoid needing welfare benefits in retirement. 'The LGPS is the most robust public sector pension scheme. Compared with other major public sector pension schemes, the employer contribution rates in the LGPS are also generally much lower.' A Hackney council spokesman said: 'Council tax income is just one of many funding sources that form our £1.9bn budget this year and help us deliver over 800 services that our residents rely on.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
a day ago
- Business
- Telegraph
Revealed: the council that spends more on pensions than it collects in tax
Cash-strapped local authorities are spending more than half of their council tax revenue on staff pensions, a Telegraph investigation has found. The Shetland Islands council puts the equivalent of 111pc of its council tax haul into staff pensions, while councils in Hackney, South Oxfordshire, Newcastle-under-Lyme and the Orkney Islands all shell out more than half. Another 19 fork out the equivalent of at least a third of what they take in. Together, the 24 councils have stuffed almost £3bn into staff pensions over the past five years – but still hiked their tax rates by an average of over 7pc for 2025-26. As rates soar to record levels and second home owners are hit with double premiums, Telegraph Money can reveal: 12 Scottish, nine English and three Welsh local authorities now shell out more than a third of their council tax on staff pension contributions – with the total bill exceeding £730m a year. 60 councils spend at least 20pc of what they collect. The Local Government Pension Scheme already pays 2.3 million retirees and another five million current and former workers are building up generous, inflation-linked pensions. It comes after nine in 10 areas across England endured the maximum 4.99pc council tax rise last month, with parts of Scotland and Wales slapped with even higher increases. Local authority funding comes from multiple sources, including government grants, but tax receipts represented more than half of English councils' core spending power last year, according to the Institute for Fiscal Studies. The Local Government Pension Scheme for England and Wales is one of the world's largest funded schemes, with 6.7 million members and £390bn in assets. Scotland's scheme has another 639,000 and assets of £60bn. Together, they pay retirees £15bn a year in inflation-linked, guaranteed pensions for life. Employers pay an average contribution of 19.8pc of salaries for staff pension in England and Wales and 17.5pc in Scotland. Now, following a series of Freedom of Information requests, The Telegraph can reveal the true cost of the generous schemes – and how much of your council tax is used to fund them. Nigel Farage, Reform leader, said: 'For all the talk of debt, for all the talk of interest rates, for all the talk of local, county and national budgets, the real elephant in the room is public sector pensions. 'What is happening is a microcosm of an even bigger national problem. These will present big challenges for Reform in the councils we're in control of.' The Shetland Islands council reported the highest percentage of contributions paid compared to council tax collected with 111pc. Its pension costs of £74.9m over the past five years dwarfed the £67.7m it collected from ratepayers. In March, council officials said the council's major spending commitments and millions in borrowing repayments would lead to cuts to everyday services. Orkney Islands council was also near the top of the list after spending the equivalent of 58pc of council tax. The highest in England was Hackney council, which collected £415.2m in council tax between 2020 and 2024 and paid £243.3m, or 59pc, into staff pensions. It has yet to release its 2024-25 figures, but confirmed in November it would need to make savings of £67m by 2028. South Oxfordshire district council received £43.8m over the past five years, but spent £25.2m, or 58pc. Blaenau Gwent county borough council, at 39pc, was the highest in Wales after taking in £176.9m and spending £68.5m. A total of 60 local authorities have spent more than a fifth of the council tax they collected on pension contributions since 2020-21. Among the 24 that spent over a third, the average council tax increase for 2025-26 was 7.5pc. It ranged from 1.99pc in Newcastle-under-Lyme to 15pc on the Orkney Islands. Birmingham council, which effectively filed for bankruptcy and announced £300m in cuts over two years, spent more than £100m a year, equivalent to 29pc of its council tax. The figures come as homeowners and renters battle soaring council tax rates across the country. Almost half of properties in England now face bills of at least £2,000, while the number of households on the hook for a £5,000 bill has quadrupled. Six councils were also granted permission for exceptional increases by Angela Rayner, with Labour-run councils in Bradford and Newham hiking rates by 9.99pc and 8.99pc respectively. Increases in Scotland and Wales were even higher. Second home owners have also been hit after more than 200 local authorities brought in a 100pc council tax premium from April 1, enabled by rules introduced under the Conservatives. Telegraph analysis found that 2,000 second home owners in popular holiday hotspots could face bills of £10,000 or more across both their residences. The average second home owner will now see their tax bill rise 77pc to £3,672 in 2025-26. John O'Connell, of the TaxPayers' Alliance, said: 'Local taxpayers are fed up with seeing more and more of their cash being used to prop up gold-plated pensions that most could only dream of. 'Households across the country are still reeling from the latest round of council tax rises and authorities are cutting back key services. All the while, those working in local councils are sitting pretty on defined benefit nest eggs that are all but non-existent in the private sector.' Despite the amounts paid in by councils, the Local Government Pension Scheme remained almost £6bn in deficit at its last valuation. Of 87 individual schemes, 26 still didn't have enough money to pay their retirees. There were hopes that councils would be able to cut their contributions following the next round of valuations, due later this year. However, experts fear this is now less likely after Donald Trump's announcement of global tariffs hit investment markets. Andy King, of wealth manager Evelyn Partners, said the 'huge divide' between public and private sector pensions raised questions over affordability and fairness for taxpayers. He said: 'A lot of council tax payers will be surprised at just how much of their continually rising bills go towards funding pensions, rather than into local services. The scheme is hugely more generous than private sector pensions, and local government staff may not know how good it actually is.' A Local Government Association spokesman said: 'The Local Government Pension Scheme [LGPS] can help encourage people to develop a career in local government. With pay often lower in local government than comparable private sector roles, the LGPS can mitigate that while occupational pensions, like the LGPS, can help public sector workers avoid needing welfare benefits in retirement. 'The LGPS is the most robust public sector pension scheme. Compared with other major public sector pension schemes, the employer contribution rates in the LGPS are also generally much lower.' A Hackney council spokesman said: 'Council tax income is just one of many funding sources that form our £1.9bn budget this year and help us deliver over 800 services that our residents rely on.'
Bloomberg
2 days ago
- Business
- Bloomberg
What Trump's Tariff Trials May Mean for Markets
Welcome to the award-winning Money Distilled newsletter. I'm John Stepek. Every week day I look at the biggest stories in markets and economics, and explain what it all means for your money. I've ignored the tariff hokey cokey (in out, in out, shake it all about) so far this week, in favour of more exciting stories about UK pension compulsion and Japanese government bond auctions. But, as the weekend approaches, it's probably not a bad time to set the scene, so we're all on the same page if there's more drama next week.
