Pan-European Personal Pension Product (PEPP)

Pensions are attractive if they obtain tax relief and so Brussels recommends national governments give the Pan-European Personal Pension Product similar treatment to current local pensions. As yet, it is unlikely that the tax treatement will be harmonised between member states.

Transparency

The Pan-European Personal Pension Product will require providers to disclose all fees to savers before they subscribe in a Key Information Document, and during the lifetime of their PEPP in the Annual Benefits Statement. This will facilitate comparison with fees charged by different providers. This enhanced transparency and possibility to switch providers creates incentives for providers to keep their fees low.

The fits in well with the MiFID II rules, due to come into force in 2018.

Advice

It is planned that the Pan-European Personal Pension Product will be an advice based product, though default options will be available as a non-advised product off the shelf.

As always, potential investors should ensure their adviser is appropriately qualifed

Summary

Ultimately, whether UK residents will have access to the Pan-European Personal Pension Product will be down to Brexit negotiations. And, the FCA would not regulate the pension as this is within the remit of the European Insurance and Occupational Pensions Authority, which is an EU institution

Valdis Dombrovskis, a vice-president of the commission responsible for financial services, said the brand would act as a quality kite mark, giving people confidence their cash was safe.

“It has enormous potential as it will offer savers across the EU more choice when putting money aside for retirement,” he said.

The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.

This article was published on 30th June 2017

“About

Chris Lean

Chris is a Chartered Financial Planner who writes blogs and articles to simplify and explain some of the financial issues that affect UK expats. Subjects include; hot topics, regulation and the ever-changing world of finance.

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