Your May roundup: news from the world of finance, business and technology
Financial Conduct Authority publishes paper on Intergenerational Differences
At the beginning of May, the FCA published a paper on the changing financial needs of consumers from different age groups.
The paper has opened up a discussion around the unique needs of different customers, and whether financial services providers should create bespoke offerings to meet them.
According to the FCA, each generation is facing its own financial challenges. Many Baby Boomers are struggling to maintain their standard of living as they live longer into retirement, while Gen-Xers are torn between helping older generations and financially supporting younger ones.
For millennials, the big financial strains appear to be rising round prices, student loans and unstable employment opportunities.
Shake-up of the NHS pension scheme on the cards
After thousands of senior doctors have opted for early retirement to avoid the NHS pension ‘tax trap’, ministers are finally considering an alternative for healthcare professionals across the country.
Anyone that’s in the later stages of their career might be unknowingly exceeding their lifetime contribution allowance (£1.055m) in line with its reduction in recent years, and so could end up with a sizeable tax bill when they finally hang up their boots.
As a result, many healthcare professionals have begun to retire early in order to be safe — a phenomenon that’s at odds with the needs of an already overstretched NHS.
As a potential solution, ministers — led by the chancellor, Philip Hammond, and the health and social care secretary, Matt Hancock — are considering introducing a ‘50/50’ pension scheme that’s already used in local government.
Essentially, members at risk of exceeding any allowances could opt to pay in half of their usual contribution in return for half of the defined benefit — meaning they could stay in the pension scheme for longer without incurring tax charges.
(If you want to know more about the NHS pension scheme, you can read our full guide.)
TransferWise now most valuable fintech in Europe
After a new series of investment rounds, Transferwise has overtaken digital bank OakNorth to become Europe’s most lucrative fintech, doubling its profit in the last 18 months.
And if you managed to miss it… Theresa May announced that she would be stepping down as Conservative party leader on 7 June.
It’s expected that we’ll have a new PM by the end of July — but who’s next? Several conservatives have thrown their name into the mix already, including Boris Johnson, Esther McVey, Jeremy Hunt and Rory Stewart.