All ready the means-testing system is posing a threat of mis-selling risk to Independent Financial Advisers. Experts in the financial world are worried that people who are on low incomes, who have been automatically included in the pension personal account schemes will find that 40 per cent of the savings that they worked hard to achieve may be clawed back through the means-testing benefits.
It is feared that this could be happening now, if an employee on a modest wage is encouraged to save, then retires and benefits agencies discover that he has savings, he will have made himself inelligible to claim any benefits that are means-tested. In order to avoid future claims of mis-selling, Independent Financial Advisers should warn both employers and pension scheme members likely to be affected, to the risks of saving.
Our view
It is a travesty in this country. As financial advisers, we are liable to complaint if we recommend you invest in a pension and you then subsequently lose means tested benefits in thirty years time. We can also be taken to taken to task if we do not recommend you take out a pension and you retire in poverty. The compensation culture in this country will drive the country to ruin.