UK's rich exploit pension loophole - papers 16 June

Some wealthy Britons are exploiting a tax loophole that allows them to retire abroad with their UK pension savings and live tax-free, The Guardian reports.

Within a few years the loophole could cost the exchequer hundreds of millions of pounds as increasing numbers of retirees with large pension pots escape paying UK tax rates on their pension income.

Under new pension rules, which took effect in April 2006, wealthy pensioners are able to transfer their retirement pot overseas and after five years they can convert their fund into cash, often tax-free. The Isle of Man, Guernsey and Jersey appear on an approved list of destinations for UK pension transfers, alongside Switzerland, Australia and New Zealand.

Ministers, who have so far resisted calls for extra spending on state pensions, have approved hundreds of applications from financial advisers to take their client's retirement funds offshore under the Qualifying Recognised Overseas Pensions Scheme (QROPS) rules.

LLOYDS TSB IS considering a bid for Deutsche Postbank, Germany's biggest retail bank, to put into action its long-held ambition to expand internationally, according to The Independent.

A deal, which could cost €12bn (£9.5bn) would be a massive undertaking for Lloyds. The bank has looked at Germany before and had talks with Deutsche Bank earlier this decade.

The lender would give Lloyds more than 14.5m customers and 850 branches in Europe's biggest economy.

SAUDI ARABIA HAS offered to increase oil production, as the world’s biggest oil exporter moves to address global fears that prices are spiralling out of control, it emerged yesterday, The Times reports.

The Kingdom, an influential Opec member and a huge force in world oil production, is prepared to raise output by 200,000 barrels a day next month in response to requests from customers, according to Ban Ki-Moon, United Nations Secretary-General.

The UN chief said that Saudi Arabia had already increased production for June by 300,000 barrels a day.