Regulator seeks to make platform switching easier On 16 July 2018, the Financial Conduct Authority (the FCA) published its interim report on the investment platform market study. The FCA notes that the investment platforms market has almost doubled in size since 2013, accounting for 500bn assets under management and remains a growing sector. The FCA, therefore, considers it vital that competition between platforms is working well and that investors continue to get a good deal

National Savings & Investments (NS&I) has introduced limits on its offerings for wealthier savers. In mid-June NS&I announced a revision to the terms of its popular Guaranteed Growth and Guaranteed Income Bonds. The interest rates were left unchanged, but the maximum investment per person, per issue was cut by 99%, from £1 million to £10,000. NS&I ostensibly exists to help small savers, but in recent years it has raised investment limits – for example to £50,000 on premiums b

Important interest rate announcements were made in June, both in the UK and the US. The US Federal Reserve announced its seventh 0.25% increase in interest rates since December 2015, taking the level to 1.75%-2.00%. The rise had already been incorporated in market prices by the time it arrived, so of more interest were the press release and other papers which accompanied the announcement. These pointed to two more rate rises in 2018, and possibly three more in 2019. They also

A new report has proposed taxing the baby boomers to help resolve major issues around intergenerational fairness. The report, published by the Intergenerational Commission in May, offers ten policy recommendations which would represent a radical overhaul of the UK tax system. Examples include replacing inheritance tax with “a lifetime receipts tax that is levied on recipients with fewer exemptions, a lower tax-free allowance (£125,000) and lower tax rates (20% and 30%)”, and

The way savings are taxed is being reviewed by the Office of Tax Simplification (OTS). The OTS is looking at the way in which savings and investment income is taxed, which can be very complicated. According to its paper, published in May 2018, “the interactions between the [tax] rates and allowances is sufficiently complex at the margins that HMRC’s self-assessment computer software has sometimes failed to get it right”. The complex marginal rules mean that, “many taxpayers c

The Bank of England did not raise interest rates in May, despite earlier suggestions that it would. About four years ago a member of the Treasury Select Committee compared Mark Carney, the Governor of the Bank of England, to “an unreliable boyfriend”. The remark was prompted by Mr Carney’s record of talking about future interest rates increases that never became reality. The epithet came back to haunt the Governor last month. The Bank had been hinting strongly that rates woul

Transfers out of private sector final salaries boomed in 2017. There was a dramatic increase in the value of number of transfers out of defined benefit (usually final salary) pension schemes in 2017. A recent Freedom of Information (FoI) request to the Financial Conduct Authority (FCA) revealed that the £20.8 billion was transferred last year, up from £7.9 billion in 2016. There were 92,000 transfers, compared to 61,000 in 2016. The increase in transfers stems from a variety