Faith Glasgow

Fund industry introduces new ‘responsible investment’ definitions

In an effort to provide greater clarity and consistency in the highly subjective area of ethical/responsible investment, the Investment Association (IA) has today published an industry-wide framework of terms and categories.

The aim is to make it easier for investors to navigate this rapidly growing part of the retail fund market by introducing a common language and clear product categorisation.

70% of investors have never switched platforms, despite chance to cut costs

Platforms are not doing nearly as much as they could to ensure investors know what they are paying for their investments – and as a consequence only 30% of Isa investors have ever moved to a new platform, according to new research from platform consultancy the lang cat.

The research found that only 54% of respondents across all age groups even know what they are paying to hold their investments on their chosen platform, though those aged 55 plus are almost twice as likely to be aware of charges as those aged 18 to 24.

Pensioners on course for state pension increase well ahead of inflation

Pensioners are set to see a 4% increase in the state pension in October, more than double the current inflation rate of 1.7%.

Under the “triple lock” rules for state pension increases, the state payout will rise by whichever is the highest of consumer price inflation (year to September), earnings growth (year to July), or 2.5%.

Editor’s Comment: what investments are good for the next 40 years?

How times change. It’s hard to believe that 40 years ago, when Money Observer was first published, Margaret Thatcher had come to power months previously, Franco’s era in Spain had ended only four years earlier and the UK had just three television channels. On average, men at state pension age lived for just five years (now it’s more than 14) the average price of a home was just under £14,000 and a pint of milk cost 15p.

FCA pension figures show retirees following high-risk strategies

The latest retirement income market data published by the FCA reveals that 645,000 pension plans were accessed in 2018/19, of which 55% – 355,000 – were fully withdrawn. Just 11% of plans were used to buy an annuity.

Of those pots that were fully withdrawn, 90% were valued at less than £30,000. Meanwhile, among retirees taking a regular income from their pension, 40% were taking out cash at unsustainably high withdrawal rates of 8%-plus.