Personal Finance Society Q2 regional meetings

26 July 2016
During April, May and June Royal London delivered a brand-new presentation - “Introducing LISA” - at 26 regional meetings around the country, outlining the draft rules and how the planned new product could be used by advisers' clients.

Apologies

Back in November, when these meetings were first arranged, the intention had been to present on the Chancellor’s anticipated announcement of changes to pension tax relief in the spring budget. The 25th of March brought a radical re-think and we managed to pull together the full slide pack in time for the first event on 12th April (including full technical and compliance checks – quite an achievement in the time available)! Apologies to those advisers who were confused by the original session synopsis which was in the printed marketing material provided on the day.

Learning objectives

The revised learning objectives were:

  • To have a good understanding of how LISA works and when it might be suitable for your clients
  • To consider how it may work in conjunction with pension savings for retirement planning
  • To consider whether to offer a more tailored advice service to clients with smaller pension pots

Key messages:

  • LISA will be available from 6 April 2017[1]
  • LISA cannot be ignored by advisers offering holistic financial advice to their clients, especially if they are looking for the most tax-efficient way to save for retirement
  • Clients who opt out of their workplace pension scheme in favour of LISA will lose the employer contribution and are unlikely to be better off
  • For savings above the level of matched employer contributions, LISA will be more tax efficient for clients paying basic rate income tax
  • LISA is also likely to be attractive to self-employed clients who do no benefit from matched contributions and who may appreciate the possibility of early access (albeit with a penalty)
  • Clients paying higher rates of income tax may favour pension savings, particularly if they are looking to pass funds onto the next generation
  • LISA may also beneficial for parents and grandparents looking to help young family members onto the property ladder
  • Ultimately the clients who will benefit most will be the ones who are both eligible for and able to afford contributions to both LISA and pensions
    and
  • New rules on employer-funded financial advice and access to pension funds to pay adviser fees are likely to result in a new low cost advice offering to employees.

Feedback

We are delighted to say that our presenters received feedback scores of over 80% for both delivery and content. Each one of the events was extremely well attended and the interest and interaction from the audience certainly helped us to achieve this. We hope to be back in 2017!

Further information:

More detailed information on how LISA works and how it will interact with pension may be found in previous newsletter articles.


[1] Early indications are that the new government intend to follow through with this plan, although no formal announcement has yet been made.

About the author

Fiona Tait

Pension Specialist

Fiona joined the life and pensions industry in 1989. She is a Fellow of the Personal Finance Society, an Associate of the Chartered Insurance Institute and is currently Vice-President of The Insurance Society of Edinburgh. Fiona specialises in the areas of at retirement planning and pensions and divorce.

Last updated: 28 Jul 2016

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