Rachel Lacey

Annuity income set for biggest fall in over five years

During the period (April to June) the average income paid out on a standard annuity worth £10,000 for a healthy 65- year old fell by 4.1%, while an individual with a £50,000 pot would have got 3.8% less.

Annuities pay a fixed income that is guaranteed for life in exchange of a lump sum – either all or part of a pension pot. The reductions only effect people buying annuities now -  those who already have an annuity will not see their income fall.

Housing market has ‘air of stability’ despite Brexit cloud

The increase takes annual growth to 5.2%. Commenting on the figures, Russell Galley, managing director, Halifax, says: “We saw a slight increase in house prices between April and May, but the overall message is one of stability.

“Despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates.”

MPs call for contingent charging ban on pension transfers

The group of MPs, chaired by Frank Field MP, claim that contingent charging incentivises financial advisers to recommend transfers that may not be in the best interest of their client.

This creates a conflict of interest as it means scheme members do not need to pay an upfront fee for advice, with charges being levied only if the adviser recommends a transfer.

NHS doctors to reduce working hours unless lifetime allowance is changed

The British Medical Association (BMA) has warned the Chancellor that unless the government makes ‘tangible’ improvements to the NHS pension, doctors will start reducing their working hours.

The BMA says that pension rules and the tax system have conspired to create a ‘perfect storm’ that could force senior consultants to either reduce their working hours, retire early or quit the NHS to avoid disproportional additional tax charges on their pensions.

NS&I to switch its inflation measure, leaving savers out of pocket

From 1 May, index-linked savings certificates from NS&I will start tracking the Consumer Price Index (CPI) instead of the Retail Price Index (RPI).

With the CPI measure of inflation typically 1% lower than RPI, the move will see some 507,000 savers earn a lower rate of return on their cash.

For example, over the past decade £10,000 in an account that tracked RPI would now be worth £13,113. However, had it tracked the lower CPI it would only be worth £12,500 – a loss of £593, according to figures from Hargreaves Lansdown.

Doctors to sue UK government over pension changes

The changes, which were made in 2015, saw younger doctors transferred on to a less generous pension scheme that will result in “huge financial losses” when they retire, according to the British Medical Association (BMA).

Doctors who were within 10 years of their national pension age on 1 April 2012 were protected from the changes.