Q. I am a member of a defined benefit pension scheme and am coming up to retirement age at 60. The scheme is saying that some of my benefits, accrued before 17th May 1990, are subject to an early retirement penalty. Why is this?
A. Pension schemes are obliged to treat men and women equally without discriminating on account of gender. However this principle was established in a court case in the European Court of Justice, when a Mr Barber won his case against his previous employer, Guardian Royal Exchange. He had been denied an immediate pension when he was made redundant, where he would have been entitled to the pension had he been female. The date of the judgment was 17th May 1990, which went against previous legislation. The court ruled that for all subsequent service gender could not be used to determine differences in retirement age, but this was not made retrospective for service before that date. All occupational pension schemes had to bring their rules into line in subsequent years, but many still have a higher male retirement age in respect of service prior to 1990.
Q. Do you think interest rates for investors are going to rise anytime soon?
A. As recently as last December, investors expected the Bank of England to raise interest rates from their 6-year low of 0.5% by December 2016. But following market turbulence and some weakening of the economic data, the Bank’s most recent statement was noticeably more ‘dovish’ and the average expectation built into market prices in early February was that the first rate rise will be delayed until 2018. However, several respected analysts still expect at least one rate increase by early 2017, though almost all agree that a ‘normal’ level of 3% is unlikely to be seen before about 2025.
If you have a question you would like Trevor to answer, please email it to: yourmoney@rwpfg.co.uk or post it to Your Money, Rutherford Wilkinson Ltd, Northumbria House, 21-23 Brenkley Way, Blezard Business Park, Newcastle upon Tyne, NE13 6DS.
