Three things we learned this week

Retirement Planner’s round-up of the top pension stories this week.

Advisers warned amid crackdown on LTC fee avoidance

Local authorities may take an "aggressive stance" against schemes designed to help individuals avoid long term care (LTC) fees, an expert has warned.

Michael Young, chairman of the Society of Trust and Estate Practitioners (STEP), said advisers who recommend or even allow their clients to use trusts to try and avoid paying for LTC could see fines similar to that paid by HSBC last month.

In December, HSBC was fined a record £10.5m for mis-selling bonds to the elderly to cover their care fees. In many cases the clients were not expected to live to see the bonds mature.

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HNWs urged to claim tax relief as January deadline looms

People paying 50% tax must claim extra tax relief on their pensions before February or risk losing thousands for good, a private bank estimates.

Duncan Lawrie Private Bank has estimated that 250,000 people paying 50% income tax assume their contributions to contract-based company pensions automatically receive 50% tax relief.

However, only the basic rate of 20% tax relief is automatically credited, meaning high net worth individuals are missing out on up to £500m in tax relief every year, according to Duncan Lawrie.

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Skandia: SIPPs in danger of being used unnecessarily

SIPP investors who have the vast majority of their assets held in Unit Trusts or OEICs may be better off using a platform pension due to cost, says Skandia.

According to the group's recent Adviser Barometer, one in four people who invest in a SIPP have 90% or more of their assets held in either a Unit Trust or OEIC. With the charging structure of a SIPP generally more expensive than a platform pension, Skandia questions whether SIPP is suitable for investors who do not engage with a wide range of investments.

Nick Dixon, marketing director at Skandia said: "There is a danger that many SIPP customers are in the wrong product."

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