Insignis 018: Get Cash Clever - Reshaping Pension Planning: What Could This Mean for Your Clients?
Insignis Cash
Cash Savings and Deposit Management for Wealth Managers, Individuals, Charities and Businesses.
Welcome to this week's edition of Get Cash Clever by Insignis Cash.
In this week's edition, we explore the ￡276 billion sitting idle in UK bank accounts, confidence among high-net-worth individuals in the UK economy, which has hit an all-time low, and how the FCA's Thematic Review is reshaping pension planning. What could all of this mean for your clients?
Current Bank Rate: 4.5% (Bank of England) The next update is due on March 20th, 2025.
CPI Inflation Rate: 2.5% (Bank of England)
TOP INSIGNIS SAVINGS RATES*
Easy Access –? Cynergy Bank: 4.55%?
6 Months Fixed – National Bank of Egypt (UK) Limited: 4.50%
1 Year Fixed – Close Brother Savings: 4.58%
￡276bn held in UK bank accounts that are earning precisely nothing (The Times)
Over ￡276bn is sitting idle in UK bank accounts that pay no interest, putting consumers' savings at risk of being steadily eroded by inflation, with experts warning that those leaving their cash in zero-interest accounts could lose out on ￡6.9 bn over the next year if they don’t switch to higher interest options.
HNWI confidence in the UK economy drops to a record low (FT Adviser)
Confidence among high-net-worth individuals in the UK economy has hit an all-time low of just 48%, a sharp drop from 84% in August, as concerns over tax hikes and economic policies deepen.
Over 50s using property wealth to fund divorce ?(FT Adviser)
Research from Legal & General reveals that 11% of couples over 50 use property wealth to fund their divorce, with many relying on savings or equity release, yet only 8% seek financial advice, despite the significant impact on their retirement plans.
Reshaping Pension Planning: What the FCA's Review Means
What happened?
The FCA's Thematic Review on Retirement Income Options, released last year, has reshaped pension planning, particularly for Self-Invested Personal Pensions (SIPPs). The key areas to focus on are outlined in the 'Dear CEO' letter*, including the use of tools to assess income needs and the importance of Centralised Retirement Propositions (CRPs) that consider factors like age and risk profile. It also highlights the need for compliance with the Consumer Duty introduced in 2023, to deliver good outcomes for retail customers in retirement income planning.
In response, advisers should focus on strategies that prioritise personalised financial planning, addressing both accumulation and decumulation phases of retirement savings. ?
Why does it matter?
The era of one-size-fits-all pension planning is over. Under Consumer Duty regulations, financial advisers are now obligated to ensure that the products they recommend deliver sustained value—not only at the point of sale but throughout the entirety of a client’s retirement. This shift places a premium on investment strategies that balance security with flexibility, an increasingly vital consideration given the unpredictable nature of financial markets.
In practical terms, this means advisers must prioritise pension options that can withstand economic fluctuations and remain beneficial over time. As individuals live longer and retirements extend, the ability to pivot strategies in response to changing financial landscapes is no longer a luxury—it is a necessity.
What could this mean for your clients?
By regularly reviewing their clients’ pension planning and considering decumulation strategies aligned with risk profile, advisers can help clients make informed, sustainable decisions for their retirement.
Routine financial reviews ensure that clients stay in control of their retirement funds, adapting to changes in their financial situations or the wider market. This proactive approach helps clients build long term financial confidence, ensuring their retirement income strategy remains relevant and secure throughout retirement.
Wishing you a wonderful rest of the week. Until next time!
The Insignis Cash team
*Rates are correct on the Insignis Cash Platform as of 18th February 2025. All interest rates displayed are quoted gross p.a. and easy access may be variable. Rates are subject to a minimum and maximum deposit size, please shop around. Availability of products will vary depending on the client type. Check your FSCS coverage. Fixed-term deposits cannot be broken early. Insignis Cash does not provide financial advice.
Market information does not constitute financial advice. Forecasts may change and actual performance may vary. Please seek your own professional financial advice before making a decision.
Insignis Cash is a trading name of Insignis Asset Management Limited (Company number 09477376). Insignis Asset Management Limited is authorised by the Financial Conduct Authority under the Payment Service Regulations 2017 (813442) for the provision of payment services.