The 1% rule is to be scrapped in favour of a new pricing system permitting companies to take an upfront percentage of the amount invested in addition to the 1% AMC, says today's Independent.
The paper says the deal, revealed by "sources" will apply to both stakeholder pensions and "a range of medium- and long-term savigns products, which are due to be launched by the government next year."
"The final details of the proposals are being drafted this week, with the government expected to settle on either a 3% or 5% initial charge on all contributions, in addition to a likely 1% annual charge."
CITY ECONOMISTS yesterday warned further interest rate rises are likely to follow yesterday's Bank of England decision to increase rates by another 0.25%.
The Daily Telegraph says the increase, which took the base rate to 4.5% has divided economists on whether the housing market boom is to to blame. However, most agreed there would be at least another two rates increases before the end of the year.
THE 25 basis points rise had been widely expected by most analysts after minutes from the MPC's last meeting suggested the committee was already then thinking about an increase.
That did not stop one of Britain's best-known economic think-tanks to attack the change, claiming rates should have been hiked up to 5% if the bank truly wanted to curb consumer borrowing, reports The Scotsman.
Martin Weale, director National Institute of Economic and Social Research said: "If we were in an apolitical environment, I would have put rates at 5 per cent today."
"In our view that’s a close to normal level. I fail to understand this idea that there’s a lot to be gained from letting people carry on making mistakes with their debts."
Weale attacked the committee for believing "fine-tuning" was the way forward in order not to disrupt the markets.
"But since the markets already see rates at 5 to 5.5 per cent by the end of the year, why not discourage false trading in the meantime? That way they would keep people out of the pitfall of borrowing on the assumption that rates will carry on at 4.5 per cent," he concluded.
THE TIMES ONoffers an alterntive view by noting traders and some City economists were "surprised" by yesterday's rates announcement.
The move spurred markets and analysts to revise upwards their predictions of how far and how fast the Bank of England will raise the rate over the next 18 months, the paper says.
Most economists now believe base rates will peak at 5.5% early next year.IFAonline
Regular reminders and updates
9 December 2019 deadline
Joe McDonnell joins as head of portfolio solutions (EMEA)
Adviser of the Year - South East
Fidelity Multi Asset CIO's outlook