The latest modelling by actuaries saw life expectancy assumptions at retirement age fall 1.9 per cent, or six months, compared with the previous year’s model.

This story originally appeared on: Financial Times - Author:Josephine Cumbo

Employees and the self-employed earning or making profits over a certain threshold are required to pay national insurance contributions, or a tax on earnings, which is used to help build entitlement to certain benefits such as the state pension or maternity allowance.

Research published this week by the Pensions Policy Institute, an independent research group, compared the contributions of those aged 20, 40 and 60 with how much they might receive in retirement.

Currently, employees aged 16 or over pay NI at 12 per cent on weekly earnings between £242 and £967. Additionally, NI is payable at 2 per cent on the slice of weekly earnings over £967. The self-employed will also pay NI on earnings, depending on their profits.

The PPI analysis comes as the government considers faster increases to the state pension age, and alongside debate over how future improvements to the NHS, and social care should be funded.

In September, the Truss government reversed a 1.25 percentage point rise in national insurance intended to help fund health and social care. The current crisis in the health service is likely to renew discussion over how improvements should be funded.

“While the analysis by the Pensions Policy Institute demonstrates that the vast majority of people across the income and age spectrums will typically receive back more than they have contributed, this is not going to be the case for middle-aged high earners, who are also shouldering a relatively high proportion of the total income tax burden,” said Jason Hollands, managing director of Evelyn Partners, the wealth manager.

“Whether or not it is by deliberate design, the system therefore has a creeping redistributive element to it that is likely to become more pronounced if the state pension age rises further, as seems inevitable given the costs of the system and rising life expectancy.”

This story originally appeared on: Financial Times - Author:Josephine Cumbo

The government on Monday said it aimed to make it more attractive for staff who have left the health service to “come back” by allowing them to rejoin the NHS pension plan, which offers guaranteed indexed benefits.

It is also proposing to expand access to the NHS pension plan so that primary healthcare workers, such as GPs, general practice nurses and clinical pharmacists, can join the retirement scheme, which has more than 1mn members.

This story originally appeared on: Financial Times - Author:Josephine Cumbo

The financial watchdog on Monday put the bill to compensate workers after a British Steel Pension Scheme mis-selling scandal at about £49mn, lower than its estimates from March of £71mn.

For steelworkers, this means the average redress payout will be about £45,000, not £60,000 as estimated eight months ago.

The BSPS scandal, one of the worst of its kind in the UK, dates back to 2017 and 2018 when 7,700 members of the plan transferred their guaranteed retirement benefits, worth £2.8bn in total, to riskier arrangements, following a restructuring prompted by Tata Steel, the sponsoring employer.

The FCA found that up to 54 per cent of transfer recommendations made by financial advisers to BSPS members were unsuitable, exposing the consumers to losses in retirement income.

The FCA in March outlined proposals to use rarely invoked powers to force 340 businesses to review pension transfer recommendations given to about 4,000 BSPS members between May 2016 and March 2018.

This story originally appeared on: Financial Times - Author:Josephine Cumbo

Speaking against the backdrop of a beleaguered health service, with a record 7mn patients waiting for non-urgent care, health secretary Therese Coffey said she expected backlogs “to rise before they fall as more patients come forward for diagnosis and treatment after the pandemic”. 

A new adult social care fund “will help speed up the safe discharge of patients from hospital this winter to free up beds as well as helping to retain and recruit more care workers”, said Coffey.

Dr Vishal Sharma, pensions committee chair at the British Medical Association, said the announcement showed “the government has finally woken up to the immediate risk of doctors retiring in record numbers”. But he added that its proposals “only offer sticking plasters and not the long-term fix that the NHS desperately needs to retain doctors”.

This story originally appeared on: Financial Times - Author:Josephine Cumbo