Scottish independence carries pension cost

A Yes vote in the Scottish independence referendum will hurt individual savings accounts and pensions savers, UK-wide, according to one of the country’s most respected pensions commentators.

Tom McPhail, pensions expert at Hargreaves Lansdown, has calculated that if Scotland was to break away it would costs pensions firms and other financial institutions millions in extra back office and regulatory costs.

“Every bank, insurance company, financial adviser and investment manager north and south of the border will have to invest huge sums of money in running duplicate systems and training their employees to deal with two different regimes; to take just one simple example, if a customer wants to know what rate of pension tax relief they are entitled to, the answer will depend on whether they live in Carlisle or up the road in Dumfries,” Mr McPhail said.

In addition, institutions like the Financial Conduct Authority, the Pensions Regulator and Pensions Protection Fund will need a dedicated Scottish-only operation in addition to their current UK wide operations. “This all has a cost to investors North and South of the border,” Mr McPhail concluded.