After the torpor of Tory government, Labour has hit the road running. Yesterday Rachel Reeves said she would be pursuing plans to build a UK wealth fund. Reeves said a taskforce lead by Mark Carney has been delivered a report currently being considered by government....
Most felt concerned went they heard an obscure part of the pension universe almost blew up the UK’s financial system. The conclusion was the recent LDI shenanigans must have had a negative impact on closed private sector defined benefit pension schemes. But, if you...
A few weeks ago liability-driven investment (LDI) went from an obscure pension back water to front page news because it threatened to undermine the UK’s financial stability, forcing the Bank of England to intervene. Before the government’s mini-fiscal event, 30-year...
Since the end of September articles about liability-driven investment (LDI) have gone from the inside pages of specialist pension magazines to the front pages of the national newspapers. Rapidly rising gilt yields sparked by the government’s mini-fiscal event created...
Hot on the heels of Ian Duncan Smith’s suggestion that pension schemes should invest in unicorn technology companies came last week’s challenge from the Prime Minister and the Chancellor for institutional investors to participate in an investment big bang. While the...
Every pension journalist is aware of the intergenerational unfairness baked into our retirement system. Baby boomers working in the private sector will retire with an income for life. But if their children follow in their footsteps, they are unlikely to have...
Conventional wisdom says legacy defined benefit pensions will tide over those retiring in the next few decades while defined contribution pots gradually grow and take their place. But a recent paper by LCP called The Ski-slope of Doom dispels this myth. While public...
While auto-enrolment has bolstered pension coverage of those working for others, retirement provision has ebbed away from the self-employed. According to the Institute for Fiscal Studies, the proportion of this cohort who save for a pension declined to 16% in 2018...
In yesterday’s blog post I discussed how George Osborne’s freedom and choice has made it more challenging for scheme members to manage their retirement. Now individuals are no longer required to purchase an annuity, it's up to them to ensure their pension pots last...
In April 2015 Chancellor George Osborne changed the way people could access their defined contribution pension pots after the age of 55. Members could take a quarter of the pot as tax-free cash and there was no longer any requirement to use the remainder to purchase...
Now my series of posts explaining the UK pensions landscape has been completed, it’s time to address which issues need to be resolved to ensure pension schemes offer the best possible future to their members. In this post I explained how the UK government...
In this final post examining the current pension landscape in the UK, we turn our attention to pension schemes for public servants such as teachers, doctors, nurses and civil servants.Each government department has its own defined benefit scheme – members receive an...
This series of blog posts has explained how pensions have evolved in the UK for those working in the private sector. Now it’s time to turn our attention to pension provision for those in the public sector. Pension provision is different for those who work for local...
In the last couple of posts I explained how the Labour government responded to the decline in the number of active members of private section pensions at the start of the millennium by forming The Pension Commission in 2002. Simplified state pensions and increasing...
The last post discussed how the Pension Commission was established by the Labour government in 2002 to review the level of occupational pension provision, as well as the level of personal pensions and other savings. Postponing retirement The Commission published its...
In my last three blog posts I explained how the gold-standard of defined benefit pensions had turned from a useful recruiting tool into an expensive liability for private sector schemes by the start of the millennium. The culmination of these changes was a slew of...
In my last post, I discussed how the introduction of new accounting standards at the start of the millennium cemented the fate of the private sector defined benefit pension scheme. This post continues this discussion explaining how to value future liabilities and why...
In the last post, I discussed how changes during the 1990s turned defined benefit pension from a useful recruiting tool into an expensive liability. By the end of the decade many companies chose to close these schemes to new members. At the start of the millennium,...
In the first post of this series explaining the history of UK pensions, we discussed the concept of a retirement income and the evolution of the state pension. Unlike other European countries, the UK state pension was conceived as a basic income to keep people from...
This is the first in a series of posts which aim to bring some clarity to pensions. I aim to explain pensions from first principles to give you an understanding of the relationship between government policy, investment and regulation. The goal is to improve your...
The pension minister’s announcement that restrictions on the National Employment Savings Trust will be abolished in 2017 is a significant step towards the end of the individual company pension scheme. The European Commission’s decision to approve the lifting of the...
Today I received a press release which, at first glance, looked like one any self-respecting financial journalist should ignore. An active manager says its response to the Local Government Pension Scheme consultation was to warn against local authorities shifting into...
I’ll admit it: I have strong opinions about pensions and investment. I find it particularly vexing when anyone uses the word ‘saving’ while talking about pensions. That’s why the first blog I wrote addresses this very issue. Research released by Nest Corporation today...
In the somewhat dry and technical world of pensions it is a good week when life is enlivened by two parties expressing equally strong yet opposing views on a particular topic. The most entertaining aspect of the government’s unveiling of its Pensions Bill last week...
Last week KPMG issued a report on the asset management industry declaring the number of global players would halve by 2030. Forecasting the size of an industry to decrease by 50% is certainly a headline-grabbing prediction but that was not the only interesting insight...
t’s inevitable coalition government policy will be a Frankenstein monster – ideas from different parties are stitched together to form a whole. And then politicians cross their fingers and hope it will be cohesive enough to lumber through to the next election without...
A collective defined contribution scheme, which pools together assets from multiple companies, has much to recommend it. It’s no longer effective for many companies to set up their own DC schemes – it requires too great a commitment from the executive team. In...
Even though more than two months have passed since Budget, the pensions industry is still coming to terms with the long-term implications of dropping the requirement for pensioners to buy an annuity on retirement. The most important concern is to ensure members buy...
After months of speculation, the announcement by the government at the end of March that it will impose a 0.75% charge cap on all defined contribution schemes used for auto-enrolment pension schemes at least drew a line in the sand for the pensions industry. While a...
Indulge me in a thought experiment. Imagine that an asset management firm has commissioned a marketing company to carry out some consumer research. In a room 20 people are gathered from an appropriately broad range of ages and demographic backgrounds. The...