Press comment: Pension allowance cut confirmed as government announces Finance Bill No. 2 | Old Mutual Wealth
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Pension allowance cut confirmed as government announces Finance Bill No. 2

13/07/2017

If you are covering the government’s announcement that it will legislate for all policies that were included in the pre-election Finance Bill, including the money purchase annual allowance, please see the following commentary from Old Mutual Wealth’s head of retirement policy Jon Greer:

Jon Greer“Finally we received on clarity on the reduction to the pension Money Purchase Annual Allowance and the industry will be pleased to be able to advise appropriately on this change that has been stuck in limbo for months. This policy has been a thorn in financial advisers sides as it made it difficult to advise some clients, who could be affected, with any degree of certainty.

“Uncertainty and changes to pensions tax rules are too often bedfellows. The recent Retirement Income Study from the FCA noted that this distrust is causing people to make rash decisions about their retirement provisions and found that 'most pots are fully withdrawn and consumers withdraw their savings partly because they have limited trust in pensions.' We urge the new government to carefully consider its future policies and halt this unpalatable ride.

“However, the cut to the MPAA is at odds with the direction of travel in the retirement market and those planning for retirement. Giving people the freedom to withdraw retirement income as and when required has made a flexible transition to retirement possible. Many will prefer to phase into retirement, reducing their working hours and topping up income with pensions. But under the MPAA, those that chose to top-up income with a retirement fund and then later make contributions during period of work could be punished by this regressive curb on the standard annual allowance.”

For more information contact

Michael GlenisterOld Mutual Wealth020 7778 963807469 144535michael.glenister@omwealth.com
Kathleen GallagherOld Mutual Wealth023 8072 629307990 004932kathleen.gallagher@omwealth.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £116.5 billion in customer investments (as at 30 June 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• Private Client Advisers to Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.