Under the new pension freedom rules, people can easily take one-off pension withdrawals from their funds. In fact, says the Telegraph, 242,000 people did so last year, and most had tax deducted from their payments under HMRC rules at rates assuming they would take the same amount every month for the rest of the tax year.

If they didn’t in fact make those further withdrawals, the system would result in more income tax being paid than was in fact due. Yet only 43,000 of them had made a tax reclaim, so the Telegraph concluded that up to 200,000 people may well have paid too much tax on their pension withdrawals and didn’t understand that they could get it back.

Foreign landlords leave Britain

There has been sharp fall in the proportion of Buy To Let property in the UK owned by foreign landlords, says the Mail. In 2010 they accounted for 12 per cent of all residential property let in the UK, but in 2017 that had fallen to just 5 per cent. In London, the ratio has fallen from one in four homes to one in ten over the same period. The biggest decline has been in European ownership. Experts say the tax changes, including liability to capital gains tax for foreign investors when they sell, have deterred people, but lower expectations for price rises in the South East have also played a part.

Are you really covered?

The Mail ran the story of a 66-year-old nurse who had a mastectomy to treat cancer, but was refused a pay out on her critical illness policy because her specific condition wasn’t covered. Experts pointed out that policies taken out today (hers was started in 2001) have wider coverage, and that medical advances mean the scope of cover with these policies is bound to change, so that regular reviews of these types of policy is essential.

Too little risk?

Are young savers who are auto-enrolled into the NEST pension scheme taking too little risk, asked the Mail. The reason it asked is that NEST’s ‘default’ option for younger savers (aged 22 to 27) is a cautiously-invested fund with a large proportion of its money in safe investments. Yet, as experts agree, over the long term riskier investments like shares are virtually certain to deliver much higher returns, so most investment advisers would recommend young people to allocate their savings to a fund investing almost exclusively in shares. NEST argues that its approach is valid because young ‘first-time’ savers are nervous and may opt out of the scheme if they incur losses in the early years. Experts argue that better communication, so that savers understand that paper losses on their funds in the first few years don’t matter, is what’s needed.

Pension Withdrawals and Financial Advice Bristol

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