The Regulators don’t help, but it wasn’t the FSA. Before them it was the PII (and before them - the LIA). The FSA’s days are numbered – they’re being disbanded at the end of 2012, being replaced by the FCA and the PRA. Obviously the revised regulatory structure includes the BoE (who’s MPC meets once a month to set interest rates to try and control RPI & CPI – available from the ONS).
Now the FSA have had many good ideas including the RDR which is being implemented on 31st December 2012. Before that it was TCF (which has now been superceded by BRA). Even parliament is getting in on the act, the FSA recently had to answer questions to the TSC about RDR.
From July investment companies will need to issue a KIID for each of their funds replacing the KFD. Although the impact that this will have on firms currently issuing an IDD or SCDD is unclear. One thing that is clear is determining the ROI will be tough. You’ve got more chance of understanding Google’s SEO algorithm.
The FS industry is only partly to blame. The last governement replaced PEPs with ISAs and introduced CTFs as well as WTC, CTC and PTC. On the benefits front we were given ESA, DLA and S2P replaced SERPS (just too many letters). Oh and don’t forget the increase of SPA to 68 over the next few years. However TFC was preplaced by PCLS although income might still be decided by reference to the GAD tables.
The current government have reduced the AA for pensions and reduced the LTA to £1.5M. Not to mention keeping the NRB for IHT frozen at £325,000 (payable to the CTO). More people are exposed to HRT as the PA is increased to £8,105 (MCA is available too) but the BRB reduced to £34,370. Income tax can be reduced by investing in a VCT or EIS although I’m not too sure if this includes SSP, SMP or SAP. HMRC doesn’t stop there either CGT, VAT, SDLT and SDRT all add to the government’s coffers. Contracting out has stopped too – no more NIC rebates into PPP.
Talking of NICs you now get credit for paying NIC if your salary is over the LEL although you only pay when you earn more than PET (employer will pay when you earn more than the SET) and the amount will be dependent on the UAP and UEL.
The insurance gap is as wide as ever too. Action needs to be taken PDQ to make sure people have enough cover. The need for LTA (or FIB), PHI, CIC, PMI will never go away and can help pay the IHT bill when you RIP. Employers can do their bit too: DIS benefit can help although you’ve got to watch the BIK payments – more tax but no NICs. Lets leave the impending WPR to the side for a moment.
I’ve jumped on the bandwagon too. The FPC I got in 2001 is no FFP so I’ve decided to get the CFP – which will also give me enough credits to make me a chartered financial planner (which is different to a CFP BTW) and a FPFS. In order to hold both qualifications I need to be a member of both the IFP and the CII (which includes membership of the PFS).
I hope that’s made things a bit clearer for you.
Why not get in touch with Proposito Financial Planning and introduce a bit of clarity into your finances.