Industry News Archives - Page 2 of 8

17 May 2021

A new report from Standard Life Aberdeen has found that two thirds of people who will be retiring in 2021 don’t have enough money in their pension pots to sustain their retirement income.

The report also found that although those retiring in 2021 plan to spend an average of £21,000 a year, which is around £10,000 less than the average UK household income, many are still at serious risk of outliving their pension fund.

In fact, even with the state pension, only one third of this group will have enough money to support themselves for the entirety of their retirement if they plan on spending the £21,000 a year. Furthermore, even though the average pension fund of this group is £366,000, a third have less than £100,000 saved.

Despite the concern that many who are planning on retiring this year will not outlive their retirement fund, Covid-19 has resulted in many people accelerating their retirement plans.

Here in the UK, the Covid-19 pandemic has resulted in multiple lockdowns, job uncertainty and health concerns, all of which are reported as reasons why some people have decided to retire earlier than they originally planned. However, according to the Standard Life Aberdeen report, only 39% feel “very confident” that they’re financially ready to finish working and more than 37% of those planning to retire are concerned that they will not have enough to sustain themselves for the entirety of their retirement.

Retiring is one of the biggest life decisions and transitions a person will make and with longer life expectancy, volatile markets and changing regulations, not to mention the impact of the Covid-19 pandemic, it can be an incredibly confusing time.

As the Standard Life Aberdeen report has shown, retirement takes careful planning and preparation and although pension pots tend to be the most prevalent option for pension funds, retirees should also consider any of their other savings or assets that could be used to fund their retirement.

Retiring during a pandemic comes with many challenges, but it will be much easier to adapt your retirement plan than starting from scratch.

Corinthian can help you meet your retirement dreams. Get in touch – we would love to have a chat! Please contact us at [email protected] Tel: 0845 2419541

20 April 2021

Please see the attached article which is good news for Bursars to pass onto their current or former Teachers Pension Scheme (TPS) members.

McCloud Update for TPS Members

1 April 2021

It’s certainly safe to say that the past year has had its challenges, but I am hopeful that the end of the tunnel is in sight and that the road map out of lockdown remains on course.

I have pleasure in attaching our new Insights Newsletter, and delighted to share some interesting articles provided by our friends at Bryden Johnson, Clarke Williams, SITK and Beaufort Financial.

As ever, should you have anything you wish to discuss please let me know.

Corinthian Insights Newsletter March 2021

30 March 2021

What are health cash plans?

Health cash plans are schemes that allow you to pay a monthly fee and in return you are entitled to have your routine medical and dental expenses covered. For example, you might pay £10 a month and that could cover up to £100 of dental costs, £100 of physio appointments and £100 of opticians’ appointments.

While it may sound similar to health insurance, they are not the same thing and you may even have both at the same time. This is because health insurance will only cover conditions that develop after you take out a plan, whereas a cash plan can be used to cover ongoing and routine appointments.

Many employees enjoy health cash plans as a perk of their job, and they use them to help with the costs of routine health appointments. However, with the Covid-19 outbreak and the initial lockdown in the UK in March 2020, routine dental and optical appointments were put on hold.

Now, a year into the pandemic, routine appointments are available, however are cash plans still a useful employee benefit?

Are health cash plans still a useful employee benefit?

Despite the multiple lockdowns, which resulted in some routine services being put on hold, cash plan claims for dental and optical appointments have continued throughout the year. This suggests that employees are still benefiting from cash plans, and it makes sense – the Covid-19 pandemic has put a strain on people’s mental and physical health, as well as a strain on their finances.

Many cash plans include telephone helplines for stress, debt management, and addiction, as well as legal and financial information, and this support has been invaluable for people throughout the pandemic.

Another important factor to note, is that the pandemic has required many services to be delivered virtually. Cash plans can offer access to virtual GP helplines, which has meant people have been able to speak to their GP without fear of the virus.

Health cash plans and wellbeing

Another way that cash plans have come into play, is in supporting mental health. Almost half of employees feel like the pandemic has made their job more stressful, and 42% of employers have lost an employee due to inadequate wellbeing support at work. Cash plans are a way to offer support whilst employees are working remotely.

One way to make sure cash plans can continue to offer support for employees is to extend the claim period, offer payment holidays, and to pay claims in the correct benefit year, when they were rescheduled due to the pandemic.

Cash plans in a virtual world

The pandemic and subsequent lockdowns have meant many healthcare providers had to rapidly transition to an online space. By December 2020, 89% of GP consultations were delivered online using video technology.

Online counselling calls have also increased by 903% and counselling services have seen a 44% increase in anxiety calls.

With stress and anxiety at an all-time high, cash plans can provide a vital bridge to counsellors and preventative healthcare. This on demand approach to healthcare will likely remain in the future and health cash plans have the potential to enable a proactive solution to looking after employee’s health and wellbeing.

Hopefully, you now have a better understanding of health cash plans and what they are and how to use them.

As we are operating primarily remotely right now, we can offer a telephone call, or virtual video call to answer your questions. Please don’t hesitate to get in touch, we’d love to hear from you.

9 March 2021

According to the Association of British Insurers, around 1.6 million pension pots worth £19.4 billion are unclaimed due to savers failing to contact their pension provider when they move house.

Only 1 in 25 people contact their pension provider when they move house which causes many people to lose significant amounts of money which they have simply forgotten about.

Now is a good time to start thinking of which employers you have worked for and start checking if some of the £19.4 billion is yours.

The Government even have a website to help you trace lost pensions, why not give it a try: https://www.gov.uk/find-pension-contact-details

4 March 2021

Employers claims that certain roles can only be fulfilled from the office may themselves be made redundant with almost half (45%) of British office workers believing that the pandemic will result in a ‘permanent change’ to their employers approach to flexible working.

O2s ‘The Flexible Future of Work’ report, conducted by the telecoms giant in partnership with ICM and YouGov, found that 81% of respondents who anticipate a change are expecting to be able to work at least one day a week from home, with 33% aiming to increase their home working by at least three days a week after lockdown.

These potential changes to the work/life balance could also have a knock-on effect for geographical popularity. The poll showed that nearly half of city dwellers (41%) would consider a move to more rural locations and 63% of Brits would be willing to live up to an hour away from their workplace if the need to physically attend the office was reduced.

If the geography factor in recruiting is reduced, then competition to attract and retain staff could intensify post lockdown.

The findings of the report were released just days before Twitter announced that all its employees will be allowed to work at home ‘forever’.

“If our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen” said Twitter Chief Executive Jack Dorsey.

Dr Heejung Chung, Reader in Sociology and Social Policy Director at the University of Kent, who is currently researching the impact of flexible working, said: “The UK has a huge challenge with the geographic distribution of wealth, and this exaggerates the problem of overpopulation in cities. If people could work from wherever they want to, without any fear of career penalty, this would create a huge opportunity for everyone.”

Natasha Newby, Head of Proposition Development commented “At Corinthian we have always understood the need, and indeed always have had members of our team that use, agile working. We know that this is important to support the business, our client’s business needs and of course to support our team and their home commitments. Lockdown has just highlighted the efficiency of flexible working.”

3 March 2021

The Chancellor confirmed in his budget earlier today that the furlough scheme will now run until September 2021.

The furlough scheme is also called ‘The Coronavirus Job Retention Scheme’.

Employees on furlough will continue to get 80% of their salary for hours not worked, up to £2,500 per month.

From July 2021, employers will be asked to contribute more. The state will only then pay 70%, with employers expected to pay the remaining 10% of employee’s reduced income, and in August and September the state will pay 60% and employers will have to pay 20%.

You can continue work part-time while on furlough or be furloughed full-time, as now. Your employer can either put you on furlough full-time, or you’ll be able to work part-time and be furloughed for the hours you don’t work. Your employer will have to cover your wages at the normal rate for any hours you do work.

If you want to find out more, please don’t hesitate to get in touch.

25 February 2021

The Government recently announced plans to expand its dormant asset scheme to include assets from the insurance and pensions, investment and wealth management, and securities sectors. This money will be used to aid the Covid-19 recovery.

A dormant asset is defined as a financial product, for example a bank account, which has been left untouched for many years and which the provider, following industry best practice, has not been able to reunite with its owner. The dormant asset scheme is voluntary, which means business can choose whether or not to participate and how much they wish to transfer.

The Reclaim Fund, which was established in 2011, distributes the money from participating bank and building society accounts that has been left unclaimed for 15 years. So far, it has released around £150 million to help with the Covid-19 recovery.

There are around 30 banks and building societies that are included, but the expansion of this scheme will see the programme open up to City firms across the insurance and pensions, investment and wealth management, and securities sectors. This could potentially release a further £800 million to help assist the Covid-19 recovery.

This change comes after a 4-year review and public consultation process, which found there was widespread support for the scheme. The different sectors will each have their own guidelines, which will outline when assets can be moved to the Reclaim Fund. Reasonable efforts will need to be made to track down customers and reunite them with their accounts before they can be transferred to the Reclaim Fund.

This scheme will be led by the financial industry and backed by the UK government. The scheme will be focused on consumer protection, with the main priority being to reunite people with their lost funds. This will involve trying to find people who may have moved to a new house, for example, by tracing them via Royal Mail, email, telephone, a tracing service, or a credit reference agency.

That said, the scheme ran into trouble earlier this year when it was revealed HSBC had been warned by its compliance staff in 2017 that it was not doing enough to reunite customers with their money before transferring it to the scheme. While HSBC denied it wasn’t doing enough, it has since made changes to improve its dormant account policy.

Since 2011, the dormant asset scheme has contributed £745 million to charitable initiatives from dormant accounts that have been unattended for a minimum of 15 years.

In England, any money from the dormant asset scheme must be used for organisations and initiatives that are focused on young people, financial, or social investment. So far, more than £650 million has been invested in these causes across four different organisations:

1. The Youth Futures Foundation (£90m)

2. Fair4All Finance (£96m)

3. Big Society Capital (£425m)

4. Access – The Foundation for Social Investment (£40m)

In Wales, the funding is reserved for programmes that focus on climate change and supporting young people with disabilities into employment.

The Scottish government directs dormant assets funding to the Young Start programme, which aims to improve the physical and mental wellbeing of young people by supporting them to learn new skills and enter employment.

In Northern Ireland, dormant assets funding is reserved for the voluntary, community and social enterprise sector.

The expansion of the scheme will mean hundreds of millions can be invested into good causes and it will play a vital role in the recovery from the Covid-19 pandemic.

Get in touch, if you’re worried you may have dormant assets, or you have lost track of your pension funds. We can help you use the government’s lost pension tracker to try and locate your lost pensions: https://www.gov.uk/find-pension-contact-details.

12 January 2021

Significantly boosting employees’ communication about pensions could be as simple as changing the language used to describe them.

A survey, by Invesco, Nest Insight and maslansky + partners, found some common misconceptions about pension savings, and identified the barriers when it comes to engaging with workplace finances.

Its five key findings were that:

40% of the survey participants were unaware they could choose how much they pay into a pension
One in three participants thought AE contribution rates were the ‘recommended’ level of savings
68% of savers remain at the default saving rate
More than half (52%) of those saving into a pension were unaware of government tax relief on contributions
33% weren’t aware that their employer also pays into their pension.

This research suggests people rarely think about how much they are saving, and many don’t understand their different pension options.

Policy makers and pension professionals can make simple changes, particularly in the way they communicate with savers, to increase these engagement levels.

The research recommends that all communication follows four basic principles, that it dubs ‘the four Ps”: positive, plausible, plain spoken and personal.

Positive: Too often, messages focus on how savers are missing out, not what they can get if they act. ‘You can’ is more likely to engage than ‘you should’.
Plausible: People are pragmatic. A credible presentation of the benefits of saving is more likely to connect than visions of a dream retirement.
Plain spoken: Employees want to hear what they will get out, not what they put in. Outcomes need to be shown in pounds and pence, not percentages. An estimated income figure, rather than pot size, was found to be most helpful, enabling people to think about what lifestyle they will be able to afford relative to their current annual income.
Personal: ‘You’ is more engaging than ‘us’. People are more likely to want to make their own choices if they know they are on a ‘default setting’.

If you really want to improve knowledge and understanding of pensions, it is beneficial to state in plain English that people can contribute more into their pension, they can make a difference to their financial security when they’re older by rethinking contribution levels and that the contributions made when younger, work harder for people. For maximum efficacy, these statements should be backed by concrete examples using pounds and pence.

Below, we will go over some pension jargon, to help you gain a better understanding of what it’s all about.

Annual Allowance

This is the maximum amount of pension savings you can get tax relief on each tax year. In the 2020-2021 tax year the Annual Allowance is £40,000, for most people.

Annuity

A retirement income product that provides a regular income, either for life, or a set period of time.

Automatic enrolment

This means employers have to enrol their eligible workers into a pension scheme.

Defined Benefit pension

This pays a retirement income based on your salary and how long you have worked for your employer. Usually, this is only available from the public sector or older workplace pension schemes.

Defined Contribution scheme

Your contributions, and your employer’s contributions, are invested in the stock market. This builds up a pot of money, the size of which will vary based on the amount paid in, how long it is paid in for and how well the investments have performed.

Income drawdown

Also known as a Flexible retirement income product. This means you can use your pension to provide a regular retirement income. Although the income is not guaranteed for life, it allows you to change how much you take out, or to later switch the rest of your pension to a more secure retirement income product.

Lifetime Allowance

This is the highest value of pension savings you can build up before you incur a tax charge when you draw out your savings. For the tax year 2020-21 the Lifetime Allowance is £1,073,100.

Money Purchase Annual Allowance (MPAA)

This is triggered if you withdraw money from your defined contribution pension. It means you will usually only get tax relief on your pension contributions up to 100% of your taxable earnings, or £4,000, depending on which is lower.

Self-invested Personal Pension (SIPP)

This type of pension holds investments until you retire. It provides the same tax relief as other pensions. It is more flexible as you can decide what you want to invest based on your retirement needs.

State Pension

This is the weekly pension payment you receive from the UK government when you reach State Pension age. The amount you receive is based on your National Insurance record.

Tapered Annual Allowance

Your Annual Allowance is reduced (‘tapered’) if your adjusted income goes over £240,000 or your threshold income exceeds £200,000.

Tax-free lump sum

You can usually take 25% of your pension fund as a tax-free lump sum.

Hopefully, you now have a better understanding of pension jargon and feel more confident about your pension fund. When it comes to pensions or otherwise known as retirement savings, make sure you do your research, so you can get the most out of your retirement.

As we are operating primarily remotely at the moment, we can offer a telephone call, or video Zoom to answer your questions. Please contact us at [email protected] Tel: 0845 2419541

6 January 2021

I hope that you, your families and colleagues remain safe and well, and that you were able to enjoy the festive break. Despite the current lockdown, here at Corinthian we remain optimistic that 2021 will bring brighter times than 2020, and to once again let you know that we are all working remotely and we are here to help you and your colleagues.

As you may be aware the Chancellor Rishi Sunak, announced some additional support measures for businesses particularly in the retails, hospitality and leisure sector that have been forced to close.

The Chancellor has made available an additional £4.6 billion for the hardest hit businesses in the form of a new lockdown grant. This is a one-off cash grant of up to £9,000 per business property to help businesses in the following sectors that have been forced to close:

Retail
hospitality
leisure

The funding is expected to benefit over 600,000 business properties across the UK and is allocated as follows:

£4,000 for businesses with a rateable value of £15,000 or under
£6,000 for businesses with a rateable value between £15,000 and £51,000
£9,000 for businesses with a rateable value of over £51,000

Local Councils will be given an additional £594 million discretionary fund to support other businesses not eligible for the above grant but that are affected by the restrictions. Those businesses should apply direct to their Local Authority for this.

I am also attaching an article (2 min read) that we recently published on our social media channels, which you may find interesting. As ever, please feel free to contact me or our Client Support team if you need us, and we will be happy to help.

Corinthian Vision 2020