Tax forms, the cheapest ever pension and significant bond investments - here's our weekly heads-up on the financial stories that may have caught your clients' attention over the weekend …
Pension tax threat faced by thousands
Many retirement savers could be at risk of shocking tax bills for "innocently" failing to declare pension tax charges on their self-assessment forms, financial experts have warned in the Financial Times.
According to the newspaper, the warning came after HM Revenue & Customs (HMRC) said it was aware that some pension scheme members were "forgetting" to declare details of their annual allowance charges on their tax returns. The FT says the issue has prompted concerns that savers were not declaring their charges because they did not understand the system.
The taxman asked pension scheme administrators to remind members who had exceeded their annual limits and remind them to declare it on their annual tax return.
Hallelujah! The cheapest ever pension is born
The world's second-largest fund manager, Vanguard, is set to shake up retirement saving realm with the launch of Britain's cheapest pension, The Sunday Times reports.
The firm's self-invested personal pension (SIPP) will launch in the new year and is aimed at the five million self-employed people in the UK - or indeed anyone who wants to consolidate several pension pots in one place.
Independent analyst Platforum calculated that, if a person invested the maximum tax-free annual allowance of £40,000 in a pension, the Vanguard SIPP would impose £172 per year in charges, whereas investing in the same Vanguard fund would cost as much as £400 a year on the most expensive platform.
Vanguard head of Europe Sean Hagerty tells The Sunday Times: "What we are trying to reduce is cost and complexity. There is ample evidence that too much choice is bewildering… doesn't necessarily improve outcomes and probably just makes it harder for investors to make proper decision."
Bond ETFs outshine equity rivals in 2019
Exchange-traded funds linked to bond markets have seen higher inflows than their equivalent equity products so far in 2019 in what the Financial Times has called a "highly unusual development".
Bond ETFs had traditionally not seen a high amount of flows, accounting for a small portion of the $5.9trn market, which is typically used for stock market tracks. That all changed in 2019 though.
In the first 10 months of the calendar year, investors put $191bn into fixed income ETFs, compared to $158bn into equity counterparts. ETFGI co-founder Deborah Furh says: "Adoption rates have accelerated noticeably as more investors have realised that fixed income ETFs can provide efficient solutions to some of the liquidity challenges of cash bond markets.
"It is a new development to see newly launched fixed income ETFs build multibillion asset pools so rapidly."
And other investors
Getting rid of gibberish
And other investors
'Heavy financial losses'