The Football season has started which means Summer is all but over – blink and you missed it! Hopefully, an Indian summer is on the way to the UK.

Firstly, we would like to thank everyone who completed our recent client survey. Your feedback is always very welcome and helps us to focus on what’s important to you. The results were tremendously positive but have highlighted a couple of areas where we can be doing more so watch this space!

In this update, we share with you details of our new website, confirm an upgrade to our client portal (Personal Financial Portal – PFP), share our latest Investment View and share some insights on the proposed abolition of the pension lifetime allowance (LTA).

Please don’t hesitate to get in touch if you have any questions.

Kind regards
Team Intelligent Pensions

New Intelligent Pensions Website

We are delighted to announce the launch of our new website. The site contains lots of information about our business, the people working at Intelligent Pensions and our latest updates and investment views. There is also a link to the PFP from the website home page.

A huge thank-you to our clients who agreed to complete video testimonials for the website – they are fabulous!

Please click here to view the site. We hope you like it.

Updated Client Portal (PFP)

Data security is one of our upmost priorities and with the ever-increasing risks of email communication hacking and the costs and delays of postal communication, we strongly encourage all our clients to adopt the Intelligent Pensions PFP. The PFP is a safe and secure way for us to communicate and for you to keep up to date with your plans and paperwork.

 
Did you know? 75% of all cyber attacks in 2021 started with an email. (Source: Trend Micro)

We recognise new technology can be daunting, so we have prepared a series of videos and guides to helps our clients register for and get the most out of their PFP. We can also arrange a 1:1 online meeting to guide you through setting up your PFP and/or maximising the use of your PFP – please don’t hesitate to contact us if you would like to arrange a session with one of our PFP experts.

To watch a basic overview video of our PFP, please click here.
To watch a video on how to register for our PFP, please click here.
To watch a video on how to maximise the use of your PFP, please click here.

Please register for our PFP: PFP Login. Thank you.

Investment View  September/October 2023

Summer has offered no respite from the challenging markets that 2023 are delivering. August has seen further declines as investors fret over the health of the Chinese economy, concerns that US interest rates may stay higher for longer, a pessimistic outlook for earnings and the rating agency, Fitch, downgrading long term ratings of the US, which came as a surprise to markets.

 
To read our full Investment View, please click here.

Fund Name Changes:

  • Jupiter Merian Strategic Bond fund changed name to the Jupiter Global Macro Bond I Acc fund on 31/07/2023.
  • LF Ruffer Diversified Return Fund C Acc will change to WS Ruffer Diversified Return Fund C Acc from 02/10/2023
  • TB Evenlode Income B Acc fund changing to WS Evenlode Income B Acc fund on 02/10/2023
Abolition’ of the Lifetime Allowance (LTA)

You may have seen press articles covering the government’s policy which suggest that the removal of the LTA will result in additional tax charges on death benefits paid before age 75. Whilst this is certainly implied by the published documents, it is far from certain that this was their intent.

 
Here’s what we know:

  • Pension benefits paid in the form of an income after April 2024 will not be tested against a maximum allowance. They will continue to be subject to income tax however there will be no additional charge for ‘excess’ amounts.
  • After April 2024 all benefits paid to an individual in the form of a lump sum will be added up and tested against a new threshold, which just happens to be equal to the current LTA of £1,073,100. Any amounts paid above this level will be subject to income tax.
  • The Pension Commencement Lump Sum (PCLS) will remain tax-free but only up to 25% of the new threshold, i.e. £268,275, unless there is existing protection in place. This is no different from the current position.
  • The total of lump sum benefits to be tested applies per person, not per scheme, menaning that all lump sum pension benefits paid to an individual, regardless of their source, will count towards the threshold. This includes inherited lump sum death benefits and, although the PCLS it is itself tax-free (subject to the limit above), it will also be included in the amount tested against the new allowance.

and

  • The proposed legislation will mean that lump sum death benefits which take an individual over the threshold will be subject to income tax, even if death occurs before age 75.
  • Lump sum payments following death under 75 which do not result in the threshold being breached will not be subject to income tax.

 What’s unclear:

In order to facilitate the point highlighted above the government proposes removing the current exemption from income tax which applies to all ‘early death’ benefits (i.e. death before age 75). If this is not carefully drafted it could mean that any death benefits paid in the form of an income would by default become fully taxable.
It is however far from certain that this was the government’s intention, and they may only intend the tax to apply to excess lump sum payments. The industry is seeking urgent clarification from HMRC, and clients may be reassured that the tax treatment of death benefits is unchanged until the new legislation is in place.

Our recommendation at this point is to avoid making any quick decisions without speaking to us first. We will consider your specific circumstances at your annual review, and/or you can contact your financial planner, financial planner name, for further information.

Thank you for reading Intelligent Pensions Client News