THE TREASURY looks set to raise the price cap on simplified products to 1.5% in the face of concerted pressure from financial services providers.
According to both The Sunday Times and this weekend's FT the 1% cap on annual management charges looks set to be lifted to 1.5% after warnings issued by the industry suggest the current cap would make it difficult for firms to sell the products.
Proposal to introduce a 3% or 5% initial charge has,however, been rejected, Whitehall sources said.
LOOKING AT today's news,The Scotsman reports a new survey suggests the Pensions Bill, which includes measures aimed at promoting occupational pension schemes, will be more likely to decrease provision and add to employers' costs.
"Following the publication of the Pensions Bill a majority of firms (51 per cent) feel its measures will decrease occupational pension scheme coverage," the paper quotes the Association of Consulting Actuaries.
"Fewer than one in ten firms feel the measures will improve coverage."
Almost half of firms surveyed believe the Bill’s measures will add to costs, with more than a third thinking it will make no difference.
The ACA also says that within the next two years, more than nine out of ten firms will have reviewed their pension arrangements with many of them closing their defined benefit schemes to new entrants.
THAT SAID, it looks like the government has acknowledged the UK pension system faces a crisis, as ministers responsible for pensions will today hold a private summit in Windsor with 40 of the of the top industry figures from the UK and the US.
The Times, noting Andrew Smith, secretary of state for Work and Pensions, will attend, adds the summit comes less than a week ahead of a pensions march on London organised by the TUC.
BUT, WHILE the UK 'pensions crisis' seems to be deepening, The Daily Telegraph says billions of pounds in means-tested benefits lie unclaimed by Britain's pensioners.
This is because the claims process is too complicated, says charity Help the Aged.
The charity says £2.5bn went unclaimed in 2001-02 because of the complexity of means-tested benefits.
Mervyn Kohler, head of public affairs at Help the Aged, told the paper: "It is unacceptable to have so many pensioners missing out on the benefits they are entitled to. Help the Aged finds this a ridiculously muddled way to deliver support to older people, but until more enlightened policies prevail, this is the only system available."IFAonline
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