Live updates

Ministers prepare Dutch-style 'collective pension' funds

Pensions minister Steve Webb has described collective pension schemes as "some of the best in the world", as radical reforms are expected to be addressed in the Queen's Speech this week.

Pensions minister Steve Webb Credit: PA

He told The Sunday Telegraph that the key advantage was "pooling risk" of investments performing less well than expected across large numbers of people of different ages, "just like car insurance or the NHS".

"It gives people greater certainty and probably better value," he said. "There are some quite strong claims made for how much better it is. People say, you will get a 30% bigger pension.

"You might, you might not, but clearly it is pretty unambiguous that you will get a more certain outcome and potentially a better one."

Pension reforms to be addressed in Queen's Speech

A radical shake-up of workplace pensions is set to be unveiled in the Queen's Speech this week, with supporters saying retirement incomes could be boosted by thousands of pounds.

Pensions reforms to be addressed in Queen's Speech Credit: PA

For the first time, staff will be able to put their money into Dutch-style "collective pensions", shared with thousands of other members.

The so-called "mega funds" are regarded by many as a better investment because they are less vulnerable to variations in the stock market. The controversial changes, which could be introduced as early as 2016, are intended to deliver better value for pensioners.


Huge gaps in life expectancy revealed across UK

Female life expectancy (left) and male life expectancy (right) at age 65 in 2010-2012. Credit: ONS

Life expectancy remains much higher in areas of southern England than parts of the north and Scotland, new figures show.

Office for National Statistics (ONS) data indicates that life expectancy at birth for men in East Dorset is 82.9 years, while men in Glasgow are expected to live on average ten years less, to 72.6 years.

However, the gap between areas with the lowest life expectancy and those with the highest reduced between 2000-02 and 2010-12, the ONS said.

Pensioners could be given death date estimate

Steve Webb said insurers could use a number of factors to make the estimates. Credit: David Jones/PA Wire

Pensioners could be given an estimate of when they might die to help them manage their finances, according to ministers.

As part of Government guidance intended to help pensioners plan how much to spend and save, pensions minister Steve Webb said insurance companies could look at factors such as smoking, eating habits and socio-economic background when determining approximate life expectancy.

The guidance, which could be rolled out in April next year, may form part of a major shake-up of the pensions system.

The reforms also include measures to allow the withdrawal of money directly from a pension savings pot, without leaving them tied up in annuities.

Government announces crackdown on pension charges

Pensions minister Steve Webb said the government was putting charges "in a vice". Credit: David Jones/PA Wire

The pensions minister has outlined new caps on pension industry earnings that he says "will transfer £200 million" from providers' profits into "the pockets of savers".

Speaking in the House of Commons, Steve Webb announced plans to cap charges on workplace pensions at 0.75% of the funds being managed - the toughest of the options being considered.

"We are going to put charges in a vice and we will tighten the pressure year-after-year," Mr Webb said.

The cap will apply from April 2015, he said, and will include company pension schemes provided through automatic enrolment.

The move follows far-reaching pension reforms which were unveiled in George Osborne's Budget last week.


Tax-free lump sum pension limit rises to £30,000

The changes announced by Chancellor George in last week's Budget mean that from today:

  • The size of the total pension savings that can be drawn down entirely and taken as a lump sum rises to £30,000, without incurring a 55% tax charge.
  • Previously, someone with a £30,000 pot would have had to pay taxes and charges of £21,000 if they wished to take this as a lump sum, but now they will pay £4,500, leaving them £16,500 extra.
  • The size of a small pot that can be taken as a lump sum, regardless of total pension wealth, is increased five-fold to £10,000.
  • The minimum yearly income that is required to access pension savings flexibly is cut from £20,000 to £12,000.

First phase of pensions changes come into force

Pensions changes were announced in George Osborne's Budget last week. Credit: PA

The first phase of the Government's pensions revolution has come into force, giving thousands of people greater freedom over how they use their retirement savings.

The shake-up means that around 400,000 people will be able to access their pension savings in a more flexible way in the coming financial year.

Cameron: 'Why shouldn't we help bingo players?'

The Prime Minister has defended the controversial poster which said Budget help for bingo players and the price of beer were "to help hardworking people do more of the things they enjoy".

Speaking to ITV News Deputy Political Editor Chris Ship, Mr Cameron said: "I didn't see the poster myself....I think actually people have been very patronising to say that we shouldn't help bingo and that we shouldn't make sure that responsible drinkers can afford a pint in the pub."

PM hints at protecting benefits for wealthy pensioners

David Cameron has hinted that protecting benefits for wealthy pensioners would go into the Conservatives' next manifesto.

The Prime Minister said not giving benefits, such as winter fuel allowances, bus passes and cold weather payments, to top-rate taxpayers would save only "a tiny amount".

Prime Minister David Cameron speaking at a PM Direct event earlier. Credit: Steve Parsons/PA Wire

Speaking to Saga members in Peacehaven, near Brighton, Cameron said that cutting the benefits would also "introduce another complexity into the system".

He told the audience: "We will set our policy for the next Parliament at the next election. I don't want to pre-judge that.

"But the only thing I would say is that people think you save lots of money by not giving these benefits to upper-rate, top-rate taxpayers."

Load more updates