Page 15 - BAA Digital Focus

Transfer values – get the right advice
Since 2015, there has been greater exibility as to how an individual can use their De ned Contribution (DC) pension savings. This has in turn lead to an increase in the number
of De ned Bene t pension scheme members looking to transfer their bene ts to take advantage of these exibilities.
This is a decision which should
not be taken lightly. The full value of the bene ts payable from schemes such as the BAA Pension Scheme may not be easy to identify. As a result the individual may be forgoing some level of future nancial security, for themselves or their dependents, unknowingly.
Before a transfer of more than £30,000 can proceed legislation requires that the appropriate advice is sought from an Independent Financial Adviser (IFA). The Trustee would encourage all members considering transferring their BAA Pension Scheme bene ts to obtain the appropriate nancial advice to make sure the decision to transfer is in their best interests both now and in the future. You can nd an IFA in your area by visiting www.unbiased.co.uk
Short reprieve for triple lock on pensions
The uncertainty around the future
of the triple lock seems to be over,
at least for the short term. The
new Secretary of State for Work
and Pensions, David Gauke, has con rmed the current mechanism for increasing State pensions, which sees them increase each year by the higher of the average increase in wages, in ation or 2.5%, will remain in place until 2020.
However, he con rmed that
he believed it could not remain inde nitely. Speaking on the topic Mr Gauke said “If you look at what the triple lock does, it has a ratchet effect, because pensions go up by the higher of in ation or earnings, and in some years it will be one, in some years it will be the other. But over a period of time, it will mean that a greater and greater share
of GDP goes to paying the State pension, even without any increases in pensioner numbers, because that’s just the way it works. Do I think that in 10, 20, 30 years’ time we will still have a triple lock? I cannot see in all honesty how we can.”
2017 General election result
The consequences of a hung parliament are likely to bring a great deal of uncertainty for pensioners and those saving for retirement as each
of the leading political parties had very different views on their individual policies.
Tom Selby, senior analyst at AJ Bell, said “A hung parliament is the worst possible outcome for pensioners and people saving for their retirement. It means that key decisions around the State Pension Age, the State Pension ‘triple lock’, social care funding and pension tax relief are all going to
take a back seat while the wheels of Westminster slowly turn.”
In particular, the Government announced in April that it would defer the reduction in the Money Purchase Annual Allowance from £10,000 to £4,000 until after
the election. However, given the uncertainty that a hung parliament will bring and their intention to apply this change retrospectively (back to 6 April 2017), it is feared that clarity on all these issues will not be provided any time soon.
Pensions news
Focus - Summer 2017 15