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MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.
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:: Blog | August 2008 (7 blogs) | Pension Simplification...
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Pension Simplification: A-Day - employers' and IFAs' views
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Two research reports were released by HMRC recently which looked into the affects of pension simplification or 'A-Day' as it became known. Judging by the responses it seems that there's never been a greater need for quality generic pension education and pension guidance. So, here are some snippets of what employers and the financial services industry comments were:
Employers
- Just over half of employers (51 per cent) said they were aware of A-day, with larger employers more aware than smaller ones.
- Just over three-quarters of employers (78 per cent) responsible for some pension administration devoted between 61 and 120 staff days to preparing for A-day.
- Around two-thirds of employers (68 per cent) believe the new pension taxation regime to be complex, though this was higher for the old regime (71 per cent).
- More employers think the new regime is easier to understand (26 per cent) than more difficult (12 percent), whilst around half (54 per cent) think they are about the same.
- Four in ten employers (42 per cent) think the new pension taxation regime has had no impact on employers, with 37 per cent saying it has increased the burden.
- Employers are ambivalent about the advantages and disadvantages of the new pension taxation regime, with over four in five unable to cite any advantages (84 per cent) or disadvantages (85 per cent).
Financial Services Industry
- Almost all the IFA (95 per cent) and non-IFA firms (93 per cent) had communicated changes to at least some customers, with non-IFA firms more likely to have communicated them to all customers (75 per cent, compared to 44 per cent of IFA firms).
- Non-IFA firms devoted on average five times more staff days (50) to the transition than IFA firms (10). All IFA firms devoted at least one staff day to the transition, while 10 per cent of non-IFAs did not devote any staff days.
- Around a third of both IFA and non-IFA firms said it was easier to sell pensions under the new regime (27 per cent), with only a few saying it was more difficult.
- Although a majority of IFA (80 per cent) and non-IFA firms (84 per cent) still rate the pension taxation regime as complex, this has reduced compared to the old regime where 93 per cent of IFA and 92 per cent of non-IFA firms rated the old regime as complex.
The reports make fascinating reading. For more, see:
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Mike Jones, MyCompanyPension.co.uk, 8th August 2008
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