April 2023
03Apr

UK. DB pensions show resilience despite market turbulence

The PwC Buyout Index recorded a surplus of £120bn in March, with the drop in gilt yields driving a reduction of £40bn on the previous month. Meanwhile, the Low Reliance Index also continues to show a sizable surplus of £290bn. This index assumes schemes invest in low-risk, income-generating assets like bonds, meaning they are unlikely to call on the sponsor for further funding. The resilience of pension schemes to short term market shocks is something the Pensions Regulator (TPR) highlighted...

April 3, 2023
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March 2023
31Mar

The cost of living

We first took evidence on the cost of living crisis in February 2022, when inflation was forecast to peak at 7.25% in April 2022. Since then, we have seen the invasion of Ukraine compound the difficult economic picture and inflationary pressure seen internationally and domestically after the COVID-19 pandemic, and inflation now looks set to top 11% in October—the highest in 40 years. However, the context for the cost of living crisis and its impact on the poorest in...

March 31, 2023
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31Mar

UK confirms delay in lifting of state pension age to 68

The UK government has confirmed it will not bring forward a rise in the state pension age to 68, saying a review of the policy will be delayed until after the next general election. The state pension is at present 66 for men and women, rising to 67 from 2026. It had been due to gradually rise to 68 from 2037, under plans first announced by ministers in 2017. But Mel Stride, work and pensions secretary, told MPs on Thursday that...

March 31, 2023
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30Mar

UK. TPR launches diversity, equality and inclusion guidance for pension fund trustees

The Pensions Regulator (TPR) this week published guidance for pension scheme governing bodies and employers on equality, diversity and inclusion (EDI) with a view to  imrpoving the EDI of UK pension schemes’ boards. Louise Davey, TPR’s director of regulatory policy, analysis and advice, said: “All savers deserve to be in a well-run pension scheme that makes decisions in their best interests.” She added: “Harnessing diverse views can help pension scheme governing bodies weigh issues in more detail and openly consider aspects...

March 30, 2023
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28Mar

UK. Government backs expansion of automatic enrolment

Automatic enrolment was introduced in 2012 with the aim of helping more people save for their retirement. Since then 10.8 million people have been automatically enrolled into a workplace pension scheme and pension participation in the private sector has increased from 41% in 2012 to 86% in 2021, according to recent analysis by the Department for Work and Pensions ("DWP"). We celebrated ten years of automatic enrolment in our previous blog wherein we discussed the possibility of future reform...

March 28, 2023
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27Mar

UK. What are the implications of removing the pensions lifetime allowance?

One of the headline announcements of the budget on 15 March was the scrapping of the lifetime allowance for private pensions. The allowance – which currently stands at just over £1 million – is the maximum that an individual can draw from their pension in their lifetime without paying additional tax. Unsurprisingly, this policy, which will come into force from April 2024, has been criticised by some commentators, as it is higher earners who are likely to benefit most. How does...

March 27, 2023
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24Mar

Hackers breach U.K. Pension Protection Fund, steal employee data

Hackers obtained data on some employees of the U.K.'s Pension Protection Fund after exploiting a third-party data transfer service, according to a fund spokesperson. The Pension Protection Fund manages £39 billion of assets for its 295,000 members, according to its website. The fund protects people with a defined benefit pension when an employer becomes insolvent. By exploiting the Go Anywhere transfer service, intruders compromised some employee data, Jenny Peters, a spokesperson for the fund, said in a statement. The hackers were...

March 24, 2023
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24Mar

UK. One third of people facing a drop in retirement standards

One in three savers have moved from an expected ‘moderate’ retirement lifestyle to a ‘minimum’ lifestyle, according to analysis by Wealth Wizards. The financial planning firm analysed data from more than 40,000 users of the Wealth Wizards Pension Guidance Software as a Service (SaaS) platform and found almost one in five pensioners are not on track for the living standards they would like in retirement. Additionally, the analysis of the data gathered over the last two years found one in three...

March 24, 2023
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23Mar

Britain says it won’t ditch global accounting rule to unlock pensions cash

Britain on Wednesday played down the possibility of diverging from a globally-set accounting rule which some lawmakers blame for encouraging pension schemes to prefer low risk government bonds over stock markets. City minister Andrew Griffith in February said a global accounting rule needed reviewing as it had become a "performance penalty" which trapped cash in pension schemes which otherwise could be invested in companies and the economy. The so-called IAS 19 rule requires company defined benefit pension schemes to "mark to...

March 23, 2023
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22Mar

UK. Ministers reportedly scrap plan to bring forward rise in UK state pension age

Ministers have reportedly delayed plans to bring forward a rise in the state pension age amid falling life expectancy in the UK. The state pension age, which is currently 66, was due to rise to 68 after 2044 but reports earlier this year suggested ministers had planned to bring the increase forward to between 2037 and 2039. However, the Financial Times has reported ministers have decided to delay making a decision until after the next general election because of fears about...

March 22, 2023
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