Old Mutual Wealth adds ‘scheme pays’ feature to settle annual allowance breaches
Old Mutual Wealth, Quilter’s adviser platform, has added a voluntary ‘scheme pays’ feature to its personal pension, the Collective Retirement Account (CRA), allowing customers to settle annual allowance tax charges for any pension scheme.
Quilter has brought in the new feature following well-publicised issues surrounding the tapered annual allowance affecting many public sector workers.
Instead of building up large debts, clients can now use their personal pensions to pay their annual allowance tax charge where they have exceeded the limit.
Developed in collaboration with Quilter’s national advice business, but available to clients of all financial advisers, clients will only have to simply fill in one form to select this option for paying the tax charge. Once established by the client, the CRA will pay HMRC as soon as possible after a request is received, minimising the risk of any late payment penalties associated with other options in the market.
In addition, Charles Derby, part of Quilter’s national advice business, was also recently recognised by NHS employers as being able to give expert guidance and advice on pension tax issues to employees facing issues around the tapered annual allowance.
Ian Browne, pensions expert at Quilter, says: “The issue of annual allowance breaches has truly reached the mainstream given all the problems facing doctors, judges, members of the armed forces and other public sector employees. As such providers need to come to the fore with innovative solutions that makes it easier to pay for a tax charge many are unaware they have triggered.
“This new feature will help remove the stress of paying any annual allowance tax charges, as well as minimise the risk of incurring penalties for late payment. This is also a simple and easy to use service, which only requires the information you already need for a self-assessment. As a result we think this will give clients and their advisers a wide range of options when it comes to giving pension advice and planning.”
Graham Crossley, head of development at Charles Derby Dental and Medical, adds: “It has been great to collaborate across the Quilter group to deliver this new feature on the platform. As an organisation we have seen a large increase in the demand for tax planning in the wake of the issues facing doctors in the NHS pension scheme, and we believe that this solution should go a long way to alleviating some of the complexity involved in paying annual allowance tax charges.
“While we await the proposals from the government about how they plan to fix the issues with the tapered annual allowance, it must be remembered that this affects a large number of public sector employees. The demand for quality financial advice is only going to grow as a result and advisers need to have the tools at their disposal to make things as efficient and easy as possible.”