Current Pension Updates In The UK

The pension market in the UK is always in the news, so we’re going to take a look at some of the latest stories.

Benefits associated with using pension funds to finance housing

The government have been using pension funds in order to finance new homes. The scheme sees a potential 100,000 to 300,000 homes being built in the United Kingdom every year. This is possible through utilising some of the assets found in local government pension schemes.

This means that these new houses would find their place in the country without the government having to use any of their money. In fact, the figures indicate that approximately £10bn could be pooled in from the pension schemes in order to fund the housing project.

This was seen as a major solution that was needed in order to tackle the housing crisis that is taking place in the UK at present. And, this could well be the answer. The knock-on effects would be vast.

First and foremost, the sheer number of jobs that would be created in itself is something which is likely to encourage people in the country. It has been no secret that since the COVID-19 reared its ugly head in the UK, people have struggled and a lot of people are continually struggling to find a job. It seems that there are thousands of individuals who are searching but there is no elusive job position available for all those in need.

However, the knock-on effects will run a lot deeper. The number of new homes created would be vast, as mentioned above. But not only is the number of houses something which will rise, but so too will the quality as well. This will also provide more investment opportunities for those in the UK or those seeking to invest in the country. Investment companies can help with this, and the rest of your portfolio, from Vitality life insurance to properties overseas.

In addition to investment and extra jobs created, the quality of life for those in the UK will also rise. This will not only be beneficial to those who live in the new houses that are set to be created. But it will also have an effect on those who live in those communities as their standard of living will rise as well.

All in all, this is something which may potentially solve the housing crisis being witnessed at present. The benefits in economic growth which may arise are there for all to see.

Complaints rise against collapsed SIPP provider

There have been more than 300 claims made to the Financial Services Compensation Scheme (FSCS) against Lifetime SIPP, which went into administration. The company entered administration after a number of unhappy investors launched claims against them.

Within the last six months, 310 claims have been made against the company. Most of the claims are related to pension mis-selling. Of the claims launched, 213 are under consideration, and the rest are at an earlier stage in the application process, which means the advice type or product they are applicable to has not been determined as of yet.

Lifetime operated a total of 4,746 SIPPs across three tranches, with 1,892 in the first, 836 in the second, and 2,018 in the third, which is deemed the tainted tranche.

At the time of writing, none of the claims made have been rejected or upheld for compensation. This probably has a lot to do with the fact that the FSCS is following a different process when dealing with cases against companies like Lifetime.

This new approach has been born out of the FCA’s tougher stance when it comes to SIPP providers and the due diligence responsibilities they have to their clients.

The FSCS has announced that in order to deal with these claims accordingly it has sought advice from an external legal counsel. They are awaiting this advice at the moment. Once it has been provided and the FSCS has considered it carefully, they hope to be in a position to determine whether or not Lifetime can be officially declared as at fault for what has happened or not, so that compensation can start to be awarded to those who are entitled to it.

Kingston Smith & Partners, which is an administration firm, previously stated that £56 million is the approximate value of the compensation claims being made against Lifestyle SIPP. It is believed that £34.5 million of these claims are from people that have insurance, whereas £22 million of these claims have been made by clients who do not have insurance.