Pension reviews & furlough updates – all the changes coming in February you need to know

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February will be filled with activity for various financial concerns, affecting everything from pension investment to employment changes. These changes will impact the population across all ages and income types.

Pension investment pathways

From today, pension providers must present savers with several investment pathway options if they’re looking to withdraw funds from their pots.

In a bid to prevent long-term costs, the FCA will force pension providers to provide people who are taking money from their pensions (known as drawdown customers) with “remedies” that’ll give further information on their choices if they haven’t already taken advice.

This will aim to improve consumer decision making, and promote competition by making the charges associated with drawdown products clearer and comparisons easier.

The new regulation means consumers will be presented with four possible retirement objectives and, depending on which of these objectives most closely mirrors what they wish to do, will then dictate what “investment pathway” they should be presented with and follow.

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The four pathways will be as follows:

• I have no plans to touch my money within the next five years
• I plan to set up a guaranteed income (annuity) within the next five years
• I plan to start taking a long-term income within the next five years
• I plan to take my money within the next five years

When an option is selected, providers will be required to provide default solutions for each of them.

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Lockdown review

Nearly all of the financial changes that have been introduced throughout 2020 have been in response to the lockdown.

Since early 2020, the UK has had restrictions placed on it in some form or another and this has affected everything from banking to taxes.

Lockdown rules have been continuously reviewed by the Government and the next assessment will be made on February 15.

It remains to be seen what will come of this review but Boris Johnson and the wider Government have hinted that lockdown rules will be in place until at least the spring.

Job retention scheme – furlough deadlines

This month, HMRC will begin publishing details of employer’s furlough claims on gov.uk.

The information will cover claim periods from December 1 and will detail employer names, the value of their claims within a banded range and company numbers for LLPs.

Additionally, furloughed employees will be able to see details of the claims made for them since early December in their personal tax accounts.

It should also be noted the job retention bonus for employers from January can be claimed from February 15.

Department for Business, Energy & Industrial Strategy consultation

In December, the Department for Business, Energy & Industrial Strategy (BEIS) set out measures to reform post-termination non-compete clauses in contracts of employment.

A consultation on this has been ongoing and will end on February 26.

The Government laid out their plans as follows: “Non-compete clauses are used in contracts of employment to restrict an individual’s ability to work for a competing business, or to establish a competing business for a defined period after they leave.

“To support economic recovery from the impacts of COVID-19, the government is exploring avenues to boost innovation, create the conditions for new jobs and increase competition.”

The purpose of the consultation was to seek views on how to make non-compete clauses enforceable only when the employer provides compensation during the term of the clause, and whether this could be complemented by additional transparency measures and statutory limits on the length of non-compete clauses.

Additionally, there is an alternative proposal being evaluated which would make post-termination, non-compete clauses in contract of employment unenforceable.

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