17 Mar 2016

Fos and The Pension Ombudsman in Sipp Provider Liability Talks

The Pensions Ombudsman and Financial Ombudsman Service cannot agree on self-invested personal pension (Sipp) provider liability which is creating uncertainty for investors.

The conflicting stances have been branded ‘madness’ as the two bodies enter talks in order to try and come to a final agreement on the matter.

The differing opinion between the two ombudsmen is highlighted by the Berkeley Burke case, which was launched in October 2014 after talks of a judicial review into the Fos decision to punishing Sipp provider Berkeley Burke for not doing adviser-style due diligence.

The Pensions Ombudsman found in favour of Berkeley Burke as they claimed it was not the company’s responsibility, as trustee and administer of the Sipp, to carry out the level of due diligence that the complainant had suggested.

However, the ombudsman at the Fos found in favour of the client due to the fact Berkeley Burke failed to ensure the investment was suitable for the complainant.

A spokesman for the Pensions Ombudsman said: “We are in discussions with colleagues from the Financial Ombudsman Service to agree the best way forward on managing complaints around personal pensions where there is an overlap between our services.

“This will ensure there is consistency and certainty for the public when they ask for help to resolve their pension problems.”

An FCA spokesman said in its guide for Sipp operators, published in 2013, if firms are involved with unregulated collective investment schemes they should ensure they have enhanced procedures in place, they carry out appropriate due diligence and keep all research under consistent review.

By Samantha Atherton

19 Jan 2016

Lenders predict large spike in buy-to-let demand

Lenders have predicted a large spike in demand for buy-to-let mortgages in the coming months as prospective landlords face a 3% surcharge on stamp duty from April.

The Bank of England’s (BoE) Credit Conditions Survey showed that lenders saw demand for buy-to-let mortgages increase significantly in the last three months of 2015. Housing experts have claimed that this trend is set to continue as prospective landlords move as quickly as possible to make a purchase before April, when they will be faced with a 3% surcharge on stamp duty for second homes.

Peter Williams, Executive Director of Intermediary Mortgage Lenders Association, commented on the buy-to-let demand:

“In one respect, it shows the sector remains in good health, but it could also be an early warning sign that outside interventions risk causing a spike of activity and then a drop-off once new stamp duty rates for landlords and second homeowners take effect in April.

“The increase in buy-to-let lending has been from a far lower base than in other sectors and there are legitimate fears that – by cutting landlords’ mortgage tax relief, increasing stamp duty and considering new macro-prudential controls on lending – there will be unintended consequences which damage the private rental sector and leave the housing market no better off.”

The survey also showed that there was an increase in personal loan and overdraft applications towards the end of 2015, including a significant rise in people using finance to buy a car. The BoE has claimed that demand for unsecured debt will remain strong in the first three months of 2016, leading to fears of a reliance on credit among consumers.

By Rosa Mitchell

28 Sep 2015

17,000 interested in pension top up scheme

The voluntary pension top up contribution scheme will be coming into place next month and nearly 17,000 are planning purchase additional benefits.

In April 2014 the Treasury announced that people who reach state pension age before the introduction of the single-tier state pension, would be able to voluntary pay extra to top their pension up. The scheme will allow pensioners to purchase up to £25 a week in additional state pension, uprated by the Consumer Prices Index, in exchange for a lump sum.

Figures from the Department of Work and Pensions show that they have received 16,870 registrations of interest in regards to making Class 3A voluntary National Insurance contributions.

The new rules work by someone aged over 65 getting an extra £1 of state pension a week for every £890 they pay to the government via a lump sum. If you wanted to get an extra £5 a week you would times this by five, and so on. The rate improves the older you are, so 70-year-olds will pay £779 to get £1 back while 75-year-olds will pay £674 for every extra £1.

The government offer a 90 day cooling off period to any pensioners who change their mind about purchasing additional benefits.

By Rosa Mitchell

25 Sep 2015

Insurance products pay out £77 million a day

The UK insurance industry has so far this year paid out “more than ever before”, according to statistics from the Association of British Insurers (ABI).

UK insurers are paying out the equivalent of £77 million in claims every day, the ABI’s “Key Facts 2015” show. This is across the range of insurance products, including motor, property, travel, pet, trade credit, income protection, and critical illness.

One of the biggest products to pay out was housing insurance, with the industry paying out almost £8.2 million in domestic claims daily to help repair homes and replace contents. Despite this, 24% of people in the UK still do not have building or contents insurance.

The report also showed that people tend to seek advice when they consider a long term insurance product. Three quarters (75%) of customers had some form of advice to buy a pension, protection or other long term insurance product.

Huw Evans, ABI Director General comments:

“From helping people and businesses after an unexpected event, to saving for their retirement, the insurance and long term savings industry plays a crucial role to help families and businesses through the financial challenges of life.  Insurance means that people and businesses are not alone and have peace of mind to go about their daily lives.

“As the largest insurance market in Europe and third largest in the world, the UK industry makes a vital contribution to the economy, in addition to the individuals it helps on a daily basis. It is no coincidence that the most stable and prosperous economies in the world, like the UK, have a strong insurance and savings sector at their heart.

“However, there is some work to be done to build confidence in products, tackle underinsurance and help more people understand the value of protecting themselves.”

By Rosa Mitchell

21 Sep 2015

Recruitment- how to ensure you are hiring the right people

Small and medium sizes businesses are experiencing continued growth in the current economy, and successful business owners may need to start hiring more staff as they expand.

Quality employees help businesses not just run, but thrive and grow. Hiring the right people on your team is crucial for the success of your business, and by putting the time and effort into finding the right candidate you could save yourself from making a costly mistake that could potentially affect your company’s future.

We have listed some of the best ways to make sure you hire the right person for the role you need to fill.

  • Have a clear idea of what you are looking for

When you realise you have a role that needs to be filled or there is potential to create a new role in your business, make sure you know yourself exactly what you are looking for. Be precise and be specific, so you have an idea in mind of the kind of candidate you will be hiring. List what kind of experience you believe they will need, and what kind of skill sets they should have. Are there any specific qualifications they are required to have by law?

Once you have your perfect candidate in mind, be realistic. If you are looking for someone with a ton of experience and qualifications but offering little salary, you will be disappointed in the results you are bound to get. As a small business, you will be required to either help a less experienced potential candidate grow, or offer a realistic salary.

  • Think about where it would be best to advertise the job

For roles like admin work, you will have a good chance of finding a candidate through standard job advertisement websites. If you are looking for a more specific set of skills, have a look at advertising the job on specific trade websites or trade publications. Contact nearby universities with courses similar to the qualifications the role requires, or advertise the job through LinkedIn, targeting people that have a similar skill set to what you are looking for.

If you are more selective about where you advertise the role you are looking for, the less likely you will have to waste time by trawling through a pile of irrelevant CV’s.

  • Seek out the best CV’s

Check out each applicant’s qualifications, previous job history and experience in your industry. You can usually make a short list of about ten candidates would you would consider hiring from these three facts alone, but if you are struggling to narrow down, you could check out the LinkedIn pages of the potential candidates and see how they look on there. It may give you more insight of their strengths and their interests.

If you feel the need to, you could also check out other social media profiles the candidate may have. This way you could learn about their background, maturity level and life skills. Maybe try not to be too harsh, and people (especially young people) act a lot differently online than they do in real life, but it may be a good way of ensuring there are no large alarm bells.

  • Prepare well structured interviews

What kind of criteria do you want this person to meet? Ask some colleagues to check out your expectations and see if they are relevant and achievable.

Decide who will be doing the interviews with you. Will the candidate have a direct line manager who can sit in, or will your HR manager be able to access the candidate’s people skills better than you?

Ask the right kind of questions to find out if the candidate has the right skills for the role, but also try to find out what kind of character they have. If they constantly blame other people as their reason for moving on from their role, or are negative about their previous workplaces, this could be a warning sign. Look beyond the technical skills side of things- will this person be able to work well with other people? Will they be able to build strong businesses relationships?

When accessing the character of an individual you might want to think of your current team dynamic and if their personality would gel with the people they would be working most closely with.

  • Listen to your gut

As a business owner, if your instinct is telling you something, you should probably listen to it.  The right person for the role usually always feels right to you, as well as ticking all the right boxes in regards to qualifications and job history. If you are hesitant or have doubts about a person, it’s probably best not to hire them.

What to watch out for

We spoke to the head of HR at Shepherds Friendly Society, Nasrin Hossain, for the most important thing to look out for in a new recruit. She told us to be wary of:

  • Unexplained gaps in CV’s
  • Qualifications you are finding difficult to verify
  • Candidates exaggerating the amount of experience they have

If you believe a candidate has potential for your role but have these issues on their CV, with the right kind of detailed interview questions, you can usually determine the reasons for their CV discrepancies.

Nasrin also said:

“One of the most important things to consider when you are recruiting is that you are very clear about the role and the skills and experience you require.  Otherwise you can waste a lot of time and resources in recruiting the wrong person!”


Sometimes, even if you feel like you have ticked all the boxes and get a great feeling from an employee, it can still be a bad hire. It’s just a fact of life that this can sometimes happen. If you believe you have made the right decision, then the next step is to make the new employees feel welcome and valued- staff retention is a very important matter as well. Watch this space for next week’s blog: Staff retention- are you doing enough?

By Rosa Mitchell

16 Sep 2015

Half a million pension savers face £1,000 exit fees

New data from the Financial Conduct Authority (FCA) has shown that almost 500,000 savers have pension policies subject to exit fees of over £1,000.

The FCA surveyed 23 pension firms and found that 463,000 people with unitised pension policies, no matter what their age, would be hit with a fee of more than £1,000 if they decided to leave their policies early. Also, 39,000 people in the UK would be hit with a massive fee of more than £5,000 if they chose to leave early.

Luckily, 17 million people aged 55 or over in the UK who have a pension policy and want to exit will not be faced with a fee and about one million people would be charged £250 or less.

The majority of providers advised that the cost they would incur by paying cash to customers or making a pension transfer would be less than £50, which makes the fees seem even more exploitative.

The providers claimed that the most common reason why people are faced with exit fees, are so pension firms can recoup any outstanding initial expenses or initial commissions that had already been sent out. Other reasons include recouping charges that would have been paid through the whole life of the policy and ensuring exiting individuals were put in the same position as someone who had chosen a shorter duration of the policy at outset.

By Rosa Mitchell

18 Aug 2015

Demand for financial advisers rises by 66%

The number of people looking for financial advice has risen by 66% since the introduction of the new pension freedoms, according to research from financial and technology services firm True Potential.

A survey of 2,000 people by True Potential revealed that nearly 70% of savers who seek financial advice are now using a financial adviser to do so. Before the introduction of the pension freedoms, only 42% of people would have gone to a financial adviser.

Just over a third of people said that they would visit their bank or building society for financial advice, even though the amount of financial advisers working in banks has fallen dramatically since the implementation of the Retail Distribution Review.

Only 8% of respondents rely on the Money Advice Service, which was set up by the government in 2011 and is funded by a statutory levy on the financial services industry.

Despite the increase in demand for advice, many financial advisers remain unable or unwilling to offer it as they are wary of future mis-selling claims. Financial advisers who have dealt with pension clients have claimed that less than 10% of those enquiring about pension freedoms have successfully accessed their money since the new rules came into effect.

David Harrison, managing partner at True Potential, said:

“The introduction of the new pension freedoms has energised consumers and we are seeing high demand for advice. However, instead of a great liberation of pension funds across the country, the new reforms have left savers frustrated by industry bottlenecks, inertia and an industry refusal to play by the new rules.

“Savers are told they must seek professional advice before switching to a new provider. But many financial advisers are still wary of the new risks and future liabilities they could face in recommending a switch.

“The Financial Advice Market Review is a welcome step and I hope the outcome is more accessible advice that leverages technology and provides clearer guidance for advisers.”

By Rosa Mitchell

12 Aug 2015

UK sees signs of a cooling labour market

Starting salaries for UK workers in permanent job roles rose at their weakest pace in 18 months in July, according to a survey of recruitment agencies.

A report by the Recruitment and Employment Confederation (REC) showed signs of a cooling labour market, and comes days after the Bank of England (BoE) said it was unclear if a recent fall in hiring was due to skills shortages or a slowing of the economy.

Average starting salaries for permanent jobs rose at the lowest pace for a year and a half. Wage growth is used by the BoE to gauge when to raise the base interest rates from its current record low.

The report showed that although the number of vacancies continues to rise, it was the slowest level of growth since Britain’s labour market began to pick up in 2013.

Britain’s unemployment rate also rose for the first time in more than two years in the three months to May, but overall earnings rose. The slow pace of hiring suggests that the labour market is moderating after a string two year run.

The chief executive of REC, Kevin Green, believes the shortage of construction workers is a particular concern: “If construction companies don’t have the people they need, both infrastructure projects and housebuilding will be constrained, and this will have an impact on wider economic growth,” he said.

By Rosa Mitchell

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