Can we really afford to retire?

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Gavin and Louise looking at holidays

That’s the question Michael Buerk has been asking those tuning into the second episode of Channel 5’s documentary on our retirement planning.

1.5m of us are working beyond the retirement age with 90% reliant on state benefits alone. One in five of us have no pension at all.

Gavin and Louise have no plans to be working beyond 60. Gavin would like to retire at 55 having been in the army since 1989. This would mean them retiring together.

They are “seizing the day” but they haven’t ever sat down to work out what their dream would cost.

Louise has £22,000 in a pension pot and a buy-to-let income of £400 pm. Gavin has a military pension of £12,000 a year and a lump sum to come.

They are hoping to spend 3 months a year travelling abroad. Having been taken to the travel agent it turns out one holiday in a lifetime in New Zealand would cost them £15,000. They want to spend £10,000 pa but their pension planning tells them their combined holiday budget would be £2,500 – one dream holiday every six years.

You can’t buy a sausage with a brick (the rent trap)

Nearly 4 million Brits plan to sell their properties to fund their retirement. But they will still need to find somewhere to live.

Denni and Graham moved into rented accommodation , having sold their property to buy a salon. They are trapped in the “rent-trap” meaning they are working for their landlord, not their retirement.

Renters are stuck paying more for their rent on falling (real) incomes. The number of older people in the private rented sector has doubled in the last ten years and the vast majority of them are people on low incomes renting in the private sector.

“Once the kids leave home”

For retiring sergeant- major Gavin White, what’s critical is getting another job when he leaves the army or face a drop in income of £17,500.

Far from retiring when the kids leave home, he is looking at living on subsistence levels – not exploring the joys of the new found freedom .

For Gavin and Louise to retire at 55 and 60 , they could also consider down-sizing.

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Felicity explains it how it is

At least Gavin and Louise have the option to compromise on the dream.

Juggling as a single parent

Single mother 44 Clare Craig splits her time three ways. There’s no money to save for a pension , no money for a holiday and she can’t see beyond the life she’s not properly living on now.

Two thirds of the people who rely on the state pension in retirement are women and most are single.

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Clare has no option to save

The retirement outcomes of single parents are half the comparables of those who spent an equivalent time in a stable relationship.

Can you afford your retirement- now?

Just over half a million of us are approaching their retirement age this year.

Ivor is one such fellow, at 59 he is still working the clubs on ever diminishing earnings. He’s washed-out by his own admission – what can he do but retire? But he’s too scared to do anything else , because he has nothing to fall back on.

For Gavin White, the option of earning after he leaves the army is now the only option if his and Louise’s comfortable retirement is to happen. Hostile environments not luxury holidays – it’s not what they wanted.

Carol May is a 64 year old cookery teacher who has worked out that there won’t be a time when she won’t go to work. Nowadays she works three days a week which exhausts her- she’s a Waspi Woman.

With 40 years national insurance behind her, she only have a roof over her head thanks to charity. She relies on food-banks.

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Carol is back at work at 64

The problem is partiularly acute to women like Carol – relying on benefits and low-paid work. It’s harder to find and keep a good job as they grow older


Big ideas – need big plans

Felicity Hannah points out that for people like Gavin and Louise, it’s not enough to just save for retirement, they need to plan for their retirement.

They don’t just need a pension pot – but a retirement plan – in financial terms an AgeWage.

Gavin and Louise have used the program to create a ten year plan which involves working longer and saving in a purposeful way so retirement expectations are met.

The grim message of the program was that Gavin and Louise appeared to be the only couple over two episodes who had done just this.

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A crisis created by a lack of planning?

So was this two part documentary worth it?

There’s a lot of talk on social media about it focussing on doom and gloom. But in the gloom the gold gathers the light about it.

I found the program has given me a kick up the backside to get back to what I should be doing – “converting pension pots into retirement plans”. So I’ll give the last word to Felicity Hannah

Posted in pensions | Tagged , , , , , | 6 Comments

“Britain’s great pension crisis” – beware or despair?

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Going out after the watershed, Channel 5’s two part exploration of how fit we are to retire, sits awkwardly between the Yorkshire Vet and Chris Tarrant’s Extreme Railways, not the kind of TV you’d watch unless you’re into Michael Buerk and Felicity Hannah.

I’m a fan of episode one and , though I’m crusty enough to have difficulty with catch-up, I’ll be watching episode two when I get in from the Rewards awards tonight

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Last night we saw Aron Ling and Rachael Newton  sandwiched between Michael and Felicity work out that they haven’t saved enough to realise their dream of a gite in France and were on course for two weeks in a caravan overlooking the north sea.

They also found they would need to hand back two thirds of their week Lidl run , were they living on their post retirement AgeWage.

And they discovered that their posh steak supper at the local bistro would be downgraded to an open fish and chip supper.

All of which made them think, and it made me think too, as this couple were old enough to know better and clearly didn’t. He’s a fireman who in the public service would be looking forward to a proper pension , but he works for Norwich airport and has £60,000 in a Scottish Widows workplace pension.

A crisis of expectation

This wasn’t a program about investments or dashboards or guarantees or anything else of the paraphernalia we call “the pension industry”, it was about money saved and money to be spent.

Put simply, the couple thought they were doing ok with £60,000 put away and Felicity kept delivering envelopes that told them otherwise. Here were two working people with a reasonably affluent lifestyle and a house worth £180,000 who had a “pot but no plan”.

There wasn’t a financial planner in sight, but as Felicity kept banging on that financial planning was what this couple needed. There but for the grace of God go I and I bet a high proportion of those who stayed tuned in after the Yorkshire Vet were making some mental calculations about whether they were any different.

The harsh reality of this program was not sensational, it was horribly familiar. People are enjoying the fruits of today and complaining they cannot give up their current lifestyle for the fruits of tomorrow.

And it didn’t stop with lifestyle , one of the stories was a lot darker



A problem easier to illustrate than solve

We know from the election just how expensive it is to put pensions right on a national basis. The cost of restituting a part of the “stolen” WASPI pension is estimated at £58,000,000,000. The DWP estimate the cost of full restitution to be three times that. The cost of meeting the expectations of everyone like  Aron and Rachael could run into trillions (there are two hundred £50 billions in a trillion).

That’s how short we are of meeting our collective expectation of an age in later age. It will take a massive lifestyle shift akin to giving up smoking and drinking to adjust to a world where we are effectively saving for the retirement we dream of. While this blog focusses on the minutiae, (scam-avoidance, ending rip-off charges  and providing people with proper income choices in later life) , the big picture was on Channel 5 last night. It didn’t make for comfortable viewing for Nic

And the program didn’t stop at confronting people’s unreasonable post-retirement expectations. The sections that looked at the cost of care focussed on the post-retirement finances on a lucid lady who was losing both the love of her life and her life savings.

More questions than answers and Joe – the optimist was frustrated by the lack of magic money trees. Is it any wonder that successive Governments have been kicking these cans down the road? We can barely afford the front-line NHS, we are nowhere near affording to meet the 400 pensioners a week who sell their houses to meet their later life care costs. Opinion on social media (among my lot) was divided – but more positive than negative



The obligatory scandal slot.

Pension programs cannot get by without talking about the perils of investment and this one was no different. A couple of retired civil servants had placed the proceeds of their savings with a Forex specialist who had gone bust and now owed them their dream home in the south of Europe. They had tried to hedge their currency exposure with the wrong people and the story told us about the vulnerability we all have in the strait of Hormuz. Our tankers are laden with oil and there are pirates about. There should be protection but there not always is. My friend Joe got hot extremely hot under the collar about this,

The program walked the fine line between fear and hope, need and greed. I thought it walked the line.


Beware or despair?

As with so many crisis – including our nearest and dearest BREXIT, the impending catastrophe rarely turns out to be quite as bad as we thought and it is usually averted by pre-planning. The ads to the program included a cheery salesman from an equity release broker telling us that we could buy our sausages with bricks. On a day when M&G closed its mega-property fund for lack of liquidity, I was a little sceptical

There was a section of the program when Aron and Rachael discussed their business planning for later life. It was clear they were simply unaware of what the future held. This program stress-tested their dreams and found them falling well short of the £250,000 minimum savings threshold they’d need to stop working.

The truth is in short supply but there was plenty of it in this program.

The big question is whether this truth makes us aware – or despair.

Posted in advice gap, age wage, pensions | Tagged , , , , , , | 3 Comments

Are women saving as they’d want?



I’m in the unusual position of being in a long term partnership with a lady who earns more than me and knows a lot more about pensions than I do.

I wish it wasn’t so unusual but the sad fact is that there is a wide pensioner pay gap , just as there is a gap in earned income between men and women. For most households, women are likely to have the weaker finances.

By the time a woman is aged 65 to 69, her average pension wealth is £35,700, roughly a fifth of that of a man her age, according to a study at the end of 2018 conducted by the Chartered Institute of Insurance (CII).

Emma Maslin is a money coach asks an important questions on her blog

After having children, I had a career break. When I returned to work, for childcare reasons, I took a different role with a significantly lower salary. Then I worked part-time, with an even lower salary.

Finding myself in an unsatisfying role for which I was overqualified, I started my own business. This gave me back a sense of purpose, but took away access to an employer pension scheme with its top-up contributions.

The motherhood penalty, the flexible working sacrifice and the pitfalls of opting for a self-employed life — my pension pot has been hit by them all. How about yours, or those of the women in your life?

What worries me is that many  women I know are financially ill-prepared for retirement and feel guilty that they have let themselves or – worse – their families down.

They pay the motherhood penalty twice- firstly by losing out on personal security and secondly by societal pressure which suggests they have been financially feckless.

The situation women find themselves with regards saving are mirrored by state pension entitlements. Reforms to state pension entitlement should over the long term largely remove the state pension as a source of future inequality but in the short-term, as the WASPI women point out, women’s finances will get worse before they get better.

So what can women do for themselves?

Women do not earn considerably less than men until they reach Mum’s age

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It’s clear from this chart that women are in the strongest position to save for themselves when they are young and that as they move into their forties, both their earnings and spending power decreases dramatically.

And – due to the power of compounding interest an average earner in a good-quality defined contribution pension scheme could miss out on £100,000 in employer contributions and tax relief by leaving pension saving until they’re 40 (source Barnett Waddingham actuaries).

Put simply , the savings women make when they are younger are the ones that count most when they retire.

Many younger women I talk with are both ready to save and happy to save for their futures but lack motivation to do so as they prefer investments which they can control and have obvious positive social impact.

Historically, the assumption has been that an investment for social good won’t perform as well as one that invests with little regards to Environmental, Social and Governance considerations.

This assumption is being smashed by recent reality. The market no longer favours “sinful stocks” and is increasingly investing in the equity and debt of organisations with a low carbon footprint, strong social purpose and responsible governance.

What is more, it is now possible to invest in funds which are specifically targeting investments that  score strongly on ESG. Technology is increasingly allowing women to see through the fund wrapper and look at the underlying investments in the funds they invest in.

The weight of money flowing towards these funds is creating momentum in their favour and many of these transparently run ESG funds are out-performing more traditionally invested counter parts.

These funds are now readily available in most workplace pensions that women can invest into. We expect shortly to see them as the “standard” fund into which you are invested if you do not make a choice.

These standard funds (often known-unfortunately- as “default” funds) are expected to be selected to meet the needs of investors and increasingly research is suggesting that investors, especially younger women are demanding their money is invested responsibly.

So what am I , a 58 year old man, telling my young female friends?

Firstly, all women, but especially younger women , should stay in the workplace pension schemes into which you are enrolled

Secondly, if you are like Emma Maslin you start your own business or choose to be self-employed, you may find yourself without a workplace pension. If this is the case you should consider setting up a pension with the Government pension scheme called NEST.  This is an option for all businesses and the self-employed.

Thirdly , you should consider making extra contributions into your pension scheme. If you are in a relationship you should discuss with your partner, the importance for you of building up financial security and insist on your right to do so. For too long, young women have been told they will be looked after- too often they aren’t.

Finally, if you are one of the young women I have been meeting, then you should be investigating the ESG friendly investment options offered by your workplace pension.

Fortunately, the senior positions in reward, human resources and (for the larger employers) pension departments are likely to be on your side. “Engagement” is the buzzword and asking those who run your workplace pensions for information should be met with happy smiles!

If you cannot get help from your employer, you should get help from the helpdesk of the workplace pension provider your employer has contracted with . For those without a workplace pension, large schemes like NEST are well resourced to answer your questions,

As a final point, it’s worth thinking about the pension package when you change jobs. The current minimum pension contributions from employers under auto-enrolment are none too generous. Make sure that if you are negotiating your pay , that you include pensions in your package.

Look out for yourselves – you cannot rely on anyone else to do that for you.






Posted in pensions | Tagged , , , | 2 Comments

Regulation 2.0 (and how to pay for it).


I am on something called the Pension Regulator’s Stakeholder group which means I’m supposed to champion tPR .I get meetings with MAPS (which always get cancelled at short notice) because I represent something out there called “innovation”.

But in truth I am no champion of tPR and think MAPS as innovative as a plastic bag polluting the beach.

If Government wants its “arms length bodies” to get properly funded, those bodies had better show themselves worth funding first by publishing a clear business plan into which the private sector can choose to invest (or not).

The DWP has just completed a consultation on how its arms length bodies, tPR, the Pensions Ombudsman and MAPS are funded (the general levy)

The problem is that these arms length bodies have decided to become a whole lot more expensive.

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Nobody has put forward a good argument for why we should throw a whole load more money at this problem , the solution is – it appears – to find the best way to transfer money from member’s pots to civil servants’ pockets.

The stock response from Government is that the “pensions world has changed”, but the link between increased expenditure and change is not clear. At least in the case of MAPS, there is no business plan to back up the assertion that more money is needed.

I’m grateful to Ian Neale and Aries Insight for pointing out

When the “Single Financial Guidance Body” was announced nearly three years ago, the Government declared that it expected levies overall would not increase – and might even decrease “as the efficiencies generated from merging the three current services into a SFGB begin to materialise”.

Ian  thought then that this was optimistic and predicted steadily increasing levies. The Government stated then it had no plans to widen the funding base.

The government proposed four options to increase the levy, favouring an option, which would see a rise of 10 per cent in 2019-20 rates on April 1 2020, with further increases from April 2021 “informed” by a wider review of the fee.

Other options included a phased increase over three years of 45, 125 and 245 per cent, respectively, or over 10 years starting in 2020 or 2021.

These staggering increases will be born on a headcount basis, meaning that rich schemes like USS with high per member funding will pay little , while schemes like Smart, People’s, NOW and NEST will be landed with huge levies based on huge membership but with precious little in assets over which to recharge the extra costs.

Put in terms which ordinary people will understand, those who have least will pay most, while the schemes that have most will pay least.

That is not a recipe for fairness. Since MAPS, the biggest drain on the levy has failed to publish its magnum opus for 2019 – its business plan, I am siding with the big master trusts in their very real objections to paying more for something that is delivering less.

Conspicuous failure at MAPS

I won’t comment on the Pensions Ombudsman as I have too little to do with it , to make any kind of judgement.

As regards tPR, it has had some success, the master trust authorisation process went well and it continues to bask in the glory of auto-enrolment implementation (which it did well). It has adopted a pragmatic approach to DB regulation which looks strategically sound, forcing small schemes into a one size fits all strategy (unless they pay to be different) and focussing on managing the risks of large scheme failure. However tPR is inefficient in its work, lacking in outside accountability and anything but transparant in its publication of impacts and forecasts.

But it is MAPS that should worry the DWP and all in pensions. It is the amalgamation of TPAS, MAS and the various bits of Pensions Wise which fell outside these two. It is currently leaderless , having lost its CEO a few months into the job. It has failed to deliver the one thing it promised to deliver – a business plan. It is haemorrhaging staff and the quality of its delivery on pensions (since the departure of Michelle Cracknell) has fallen off a cliff.

“MAPS has a death-wish” as one former DWP minister told me. It is asking to be funded by the pension poor but it is doing little for the pensions poor except spend their money.

My advice to DWP

I will be watching Britain’s Great Pension Crisis with Michael Buerk and Felicity Hannah which airs Wednesday December 4 and 5 at 9:15pm on Channel 5.

My advice to DWP is that it does the same and that while watching, it asks whether it is really doing what it can to help those most in need.

We have a half-built system of universal benefits that needs every penny it can get. We have crazy plans to spend every penny (we don’t have) righting the wrongs of pension miscommunication in the past. And we are considering denuding the pension pots of the poor to pay for arms length bodies who are simply not worth the money.

Darren Philp of Smart  speaks better than I can, as he is policy Director at Smart and at the coal face.

“While we understand the need for levy financing to meet expenditure in the short and long term, we cannot support the proposals outlined in this consultation paper, which present knee-jerk solutions to a long-term and structural financing problem with the general levy.”

Gregg McClymont of Peoples speaks to the same point.

“The per member structure made sense in a world of long-term employment, where a smaller proportion of the workforce had access to workplace pension saving. But auto-enrolment is a small pot-creation machine, because it’s, rightfully, brought in a new group of people with lower earnings who move from job to job much more frequently.

“It’s completely unfair that these savers carry the heaviest regulatory burden, with master trusts paying the highest cost.”

These quotes are taken from an excellent article by Maria Espadinha of Pensions Week which you can read here


Posted in advice gap, age wage, pensions | Tagged , , , | 2 Comments

Why investment reporting has to change.



I remember when I used to provide market intelligence to Eagle Star feeding back the confusion we were creating amongst trustees and sophisticated members and policyholders who were trying to find out how funds were performing.

Every time that Eagle Star set up a new “product” – it set up a new fund series. Sometimes the only thing that changed was the way that charges were taken, but the people monitoring the funds had to check which fund series they were in and try to make sense of whether the reporting was gross or net of charges, whether they were in for a bid/offer spread if they sold – or a single swinging price and of course most of the time the mix of funds people were in was constantly changing as their investments followed a lifestyle strategy.

Even in the late 1990s I knew that the amount of money that our customers would get from their retirement saving depended on a lot more than the markets and the skill of the managers. I talked with people like Caroline Moore about the impact of transitioning (when one fund is exchanged for another) and Malcolm Kemp about tracking error (how for instance holding some cash in a fund could change the performance).

During this time it became obvious to me that whether I got value for my money was down to a lot of factors about which I had no control and that my retirement really was in the lap of the Gods (or so investment gurus seemed to me at the time).

Has anything changed?

Today I speak to a lot of people who are those “Gods”. I speak to the CIOs of large pension schemes , Trustees, IGC members and people running employer governance groups. The first complaint I hear is how hard it is to get accurate, consistent and relevant information on the performance of individual pots from the people charged with giving that information.

It was ever thus!

The reality is that they still have to rely on performance reporting that has changed little since the early 1980s when I started advising. People simply don’t get the information to know whether the bets other people have taken on their behalf have paid off, whether the costs of management have ripped into their pots or whether they have been treated fairly and profited from the markets.

Most of those who took decisions on our pots are not here to account for those decisions (Caroline and Malcolm are exceptions) but even if they were, would we be able to see where they had gone right or wrong? Even if we are super-consumers and act as trustees or sit on IGCs , we can’t see the impact of implementing a transition on a saver’s pot, we can only hope that the sequential risks that the transition involved worked in a saver’s failure.

Nothing has changed and nothing is changing. The saver takes the risk, the provider the decisions and the saver has no line of site.

Outcomes based reporting

Recently, I have come to the conclusion that the only thing that allows us to properly understand the value people have got for the money saved into their pension pot is by measuring outcomes.

I won’t bore you with the details of the AgeWage algorithm but will say that by the end of 2019, it will have been employed over 1,000,000 times to give over 1,000,000 AgeWage scores which will have been shared with insurance companies, master trusts and the trustees of large occupational DC plans.

And whether the score is 100 or 1 (and we’ve had both), the story behind the score will be different.  Helping to understand those stories is the most important feedback that a provider can give a fiduciary or a fiduciary can give a saver. Not only does it tell the plain unvarnished truth but it gives the person taking the risk a narrative about the money which is engaging and a learning experience.

Getting away from these long and slightly cliched expressions, it gives punters something to get hold of.

I think that outcomes based reporting is the only way to report on DC. Individuals take the risk, individuals deserve the reports, what they do once they are engaged is critical, but if they never engage, we know that what they do is strip our cash and leave their money to rot. That is not what anyone wants to happen.

Why Investment Reporting has to change.

For 35 years I have seen people being short-changed when it comes to reporting on how their savings have done. In that time we have become so accustomed to not being given reporting on our money that we have given up.

Today, everyone from the regulators down believe that we cannot provide a common measure of value for money (saved).  This despite the methodology of producing individual Internal Rates of Return and benchmarked IRRs is now readily available.

It seems inevitable, however hard it is to stomach, that change will come and that providers will be judged – not by their IGC and Trustee’s complex VFM reports, but by the outcomes that savers experience. Of course these outcomes are more than just the size of the pot and individuals will measure the value of their relationship with a provider by soft factors too, but the critical measure – as was shown by the NMG VFM surveys of 2017, is money in – money out.

Investment reporting must start with outcomes and build backwards. It can no longer rely on constructing fabulous statements to do with value for money depending on reporting that means nothing to the ordinary saver,

agewage evolve 1


Posted in advice gap, age wage, pensions | Tagged , , , , , , | 1 Comment

How well do we support the victims of pension scams?


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Beat the Banks linked in persona

The mark of a decent society is as much about how we treat the victims as the perpetrators of crime.

On Friday (while a horrific crime was very publicly  happening nearby), 40 of us were thinking of games to help people prevent themselves becoming victims of financial scams.

We didn’t talk about the victims of scams – perhaps we should have.

The victims of scams are known to be at risk of being scammed again. They are among the people who appear on one of the 15 known lists of the vulnerable , known to be available on the dark web. They are people who are extremely valuable to scammers as they are most likely to be scammed again.

  • I am worried that a new breed of pension scammer may be emerging, and they may be targeting those who are already scammed using pension claims companies.
  • I am worried that these companies are forming alliances – sometimes with legitimate firms and seeking safety in associations
  • I am worried that people are getting confused and that scammers can exploit that confusion and leave victims to the mercy of HMRC and the courts
  • I am relieved that at last , a Judge has recognised the victim’s confusion and separated it from collusion

Where next for the scammers?

Take a look at google and you will find that the pension scammers are currently keeping a very low profile. This may be because currently the FCA is putting the heat on social media platforms to keep financial scammers away.

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The rise of the pension claim company

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Beat the Banks is avoiding the google prescription because it claims to be on the side of the scam victims. When I first read the “Free Pension Review” headline, I thought this would lead to a warning to scam victims not to fall for one – or at least to be aware that reviews are the start of the journey that leads to perdition.

This was not the case. Entering into I met screen pages which seemed to have been scraped from the sites of the scammers themselves.

Potential customers are presented with no information about who Beat the Banks are, but get instead a series of data captures designed from which they may get a call back.

If you want an example of how confusing data capture is, look at the small print of “Cash my pension”

Cash my pension do not offer financial advice and are in fact a marketing company working on behalf of FCA regulated companies in the UK who pay Cash my pension is for their marketing services.

Cash my pension and Beatthebanks are differing organisations but they both pop up on the first page of a google search for Pension Scams.

Data capture is  the way that many people start getting scammed and anyone in the situation of the two unfortunates above are potentially giving their names to the operators of the lists of the scammed circulating the dark web.

Some pension claims companies worry me.

An “Alliance of Claims Companies”

Beat the Banks, along with a host of other claims management firms – is a member of a the Alliance of Claims Companies, indeed the executive committee includes Mike Begg , who is according to this now hidden page, Beat the Banks’ Managing Director.

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The Alliance of Claims Companies appears to have been set up to keep claims companies honest. Specifically it has set up a compliance service to enable Claims Management Companies in business after they need permissions from the FCA (since January 2019)

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I’m interested in why Beatthebanks has no mention of the FCA on its website, why it has dropped the page explaining “how it works”, why there are no mentions of anyone responsible for the service on its website and why there is a data capture on every page.

I’m interested in what expertise BeattheBanks has, since it shows only one employee on LinkedIn (not Mike Begg) and appears to be a trading name for PPI reclaims (Scotland) Ltd.

If anyone from the ACC or Beatthebanks can answer these questions , please get in touch with me

The Alliance of claims companies worries me.

Treating the scammed fairly

If anybody wants to know the story of Sue Flood they can read it in full here. She is just one of many victims of loan-back frauds that proliferated at the turn of the last decade, fighting off HMRC who are pursuing the victims of back tax for defrauding HMRC and applying 55% tax penalties on monies withdrawn early.

I have sat in court and seen the confusion that victims have about what has happened to them. This is with the benefit of years of regret for being ripped off. I have seen eminent lawyers use aggressive language towards victims as if they were the perpetrators and I have seen the impact of this ongoing aggression on the victims lives.

The attitude of the justice system towards those confused into being scammed – worries me.

Thank goodness for Judge Christopher McNall

Last week Judge McNall delivered a verdict that should come as comfort to victims like Sue Flood.

He ruled that Elizabeth Hughes had been defrauding herself without her knowing it.

The tribunal heard that Fast Pensions had contacted Ms Hughes about the pension transfer in July 2012 and subsequently moved the whole amount of £31,267 from her occupational pension to a pension held with Fast Pension.

Around the same time in 2012, Miss Hughes took out a loan to finance the completion of her PhD, which she believed to be a separate and unrelated transaction.

However, this £10,000 loan was arranged through Blu Funding, which was connected to Fast Pensions and has also now been closed down.

Because the loan was secured by Blu Funding, the tax authority pursued Ms Hughes for 55 per cent tax on the loan she had taken out.

This is because to HMRC the loan had come from the pension and should therefore be treated as an unauthorised payment from her pension scheme.

But Judge Christopher McNall accepted that Ms Hughes was unaware that these two events could be linked.

1.Note on Fast Pensons  This is the  FSCS summary of the Fast Pensions scamMy summary of what went on is here (credits to Angie Brooks).     Angie’s contextual blog is here

Those who have followed my blogs will know  that scamming is mainly about confusing the victims into thinking they are doing the right thing.

These victims put their trust in scammers and are then asked to put their trust in claims companies (who use the same techniques).

These victims then find themselves on lists of vulnerable people and find themselves targeted again and again by the same scammers.

Judge McNall’s verdict at last creates a legal precedent for those , like Sue, who have been bamboozled into schemes they know nothing about and are now being accused of being complicit with the people who scammed them.

Does this ring any bells?

Thank goodness for Judge Christopher McNall.

We must support the victims – not persecute them

There are a number of issues arising out of these blog which I will sum up in a few bullets.

  1. It seems to me that Claim Management Companies are operating outside any authority – including the FCA

  2. It seems they are able to advertise on google and elsewhere with little scrutiny of what they are saying on their sites

  3. Many of the sites advertised on the ACA advertise they are still accepting PPI claims (after the deadline)

  4. Most of the websites I have looked at show no human beings on the site.

  5. Most of the sites are primarily aimed at data capture

  6. The educational elements of the sites (especially around pensions) are crude

  7. I have found no reference to Government agencies such as MAS or TPAS or tPR or FCA as a source of additional support.

In short, the claims management sites I have visited (Beatthebanks being typical) aren’t providing much support and are leaving victims of scams open to more scamming if they succumb to the data capture.

Screenshot 2019-12-01 at 08.24.09

from Red Hawk legal  why not from beatthebanks?


If you would like to get involved in combatting pension scams you can sign up to The Transparency Task Forces’ Symposium next Tuesday (December 3rd)

Follow this link to book a place;

Posted in advice gap, age wage, pensions | Tagged , , , | Leave a comment

How Scam man and Robbin’ won the world’s first Scamathon


Scams are a worry, and not just to those who’ve been scammed.

At the world’s first Scamathon , Pension Bee’s new NED, Michelle Cracknell told us it could happen to any of us – indeed it had happened to her.

Walking down Cheapside this morning (in a disconsolate mood), she’d been stopped by a young lady selling makeover days. Michelle knew she shouldn’t but she did. Not only did she sign up but she did that half-knowing she was being dumb. Not only did she guiltily hand over her credit card details but she took a “free-pack” for a friend. I’ve got Michelle down as pretty savvy, resilient and firm.

She doesn’t take any nonsense from me. So why did she fall prey to a scammer on the day?

For Michelle it was down to the peculiar circumstances of that day, and though the damage won’t last her a lifetime, she understood “vulnerability” in personal not abstract terms.

Personal not abstract

I got a lot out of my day in Stratford and it was all about understanding vulnerability , not in an abstract but a personal sense. I don’t now think of others as vulnerable , but of the vulnerability in me of which I sense two types. First the type Michelle talked of, the insecurity that can grip us on an occasional basis that leaves us open to deceit; secondly, the cockiness that make us feel invincible, and can lead us and others into calamity. Which is why it was so very good to spend the day in teams.

I am sure my team was nothing special , but it felt special to me – spending time with Joe from Quietroom, Alana from Smart Pensions , Sophie “the brains” from Nutmeg and the boss – Lucy from Pension Bee. At one point I felt quite lost facing their youthful energy, Sophie told me not to be so stupid, they needed my experience as much as I needed their innovation.

But to see these two  problems of vulnerability through a variety of eyes, as the team allowed me to, helped our team – and I’m very pleased to say we came up with a winning solution. Not that all the solutions we saw weren’t bloody brilliant.

Together we came up with four quite different answers to a simple question, “how do you get people to simulate being scammed, in a game”.

Gaming scams.

The idea of the game comes from the University of Bournemouth who have done some of the best research on financial scams.

Screenshot 2019-11-30 at 07.01.06.png

The picture is of a society increasingly at risk of being scammed as scammers get smarter and we lose our cognitive faculties.

Screenshot 2019-11-30 at 07.25.47.png

BU at Glasto

Bournemouth University had taken a game of “Scams and Ladders” to Glastonbury Festival in 2017. The board was on show at the event yesterday.

Scams and ladders

but I can’t find any details on the web – so you’ll have to make do with the AgeWage version , which I promise we came up with entirely independently (though it looks remarkably similar)!

agewage snakes and ladders

The AgeWage version of the scams and ladders game

I’m afraid that it’s going to take something a little more engaging and relevant than this game for anti-scam game-ware to go viral.

ScamMan and Robbin’ – going viral?

I can’t say that the six hours or so we spent sorting out the kind of three minute game you could play off your SMPI statement (if you got it digitally).

Details of the game are top-secret and have been passed to the coders. You will be hearing more from Pension Bee on this shortly, but trust Romi Savova to spot and publish the genesis of our dark secret

Thanks to Romi, Rachel and all the Pension Bee team for setting this up, thank the judges, Margaret Snowden, Stephanie Hawthorne and Michelle Cracknell and thank Barclays for the use of their Hear East facility and to all the observers like Phil Castle and Oliver Payne, who came to find out.

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Yes advice is really valuable and so’s good guidance!



I had some time yesterday to read up on two documents about advice and guidance. The first was an article by John Lappin in Corporate Adviser, explaining the need in the workplace for more help for people navigating the dangerous waters as they try to move from saving to spending their savings.

The second is a report produced by the International Longevity Centre and presented yesterday to the PFS conference by Steve Webb. This report , demonstrates in financial terms how much better the average person would have been taking advice over the first two decades of the millenium – than going it alone. The answer is on average £47k and the report shows that the less affluent would have been disproportionately better off than the affluent – by taking advice.

Some people, including my friend John Mather who put me on to this report, will be surprised that I agree with both John Lappin and with the ILC

Here are the results of the ILC report itself

Screenshot 2019-11-29 at 05.58.18.png

The aggregated finding are in the bottom three rows and I have no doubt that the key conclusions are right.

  • Receiving professional financial advice between 2001 and 2006 resulted in a total boost to wealth (in pensions and financial assets) of £47,706 in 2014/16.

  • The benefits of financial advice are potentially greater for those we term “just getting by” than for those we consider “affluent”: the former would have seen a a 24% boost to their pension wealth compared to 11% for more affluent groups (those most likely to be advised).

  • Evidence also suggests that fostering an ongoing relationship with a financial advisor leads to better financial outcomes. Those who reported receiving advice at both time points in our analysis had nearly 50% higher average pension wealth than those only advised at the start

Which begs the question , why isn’t advice more generally available to the less affluent. The answer to that question is dealt with John Lappin’s article.

Steve Bee, making a welcome return to talking about financial services (since his firm’s acquisition) is clear that the employer has a key role – especially when they can put mobile technology into play

The best place for employees to find out this stuff is through their employer. Whether they’re actively involved or not, they still need to be the hub. I always thought the Money Advice Service in the early days should have been planted on every pension scheme’s website.

“Employers can do a load of this stuff because everyone’s got a computer in their pocket these days. You can make financial capability tools, simple ones, and even quite complicated ones available to everybody. It’s the next step for pension schemes.” Bee points out that the larger schemes have always done this sort of communication.

Tom McPhail believes the FCA and tPR can help too.

“I think it is now about finding a regulatory framework that enables firms to do more of the guidance stuff. There is a guidance gap not an advice gap.”


You might be slightly confused at this point by the differences in approach of those who see the benefit of advice and those arguing for guidance in the workplace.

I am here to provide some Kantian synthesis in typically cod fashion.

The problem with advice is delivery, it is not deliverable in bulk for all the reasons we know

  1. over-engineered fact-finds
  2. cost of regulation
  3. advisory business models
  4. lack of human resource

We also know that guidance is potentially deliverable in bulk for all the reasons we know

  1. mass distributors (employers, insurers and trustees)
  2. workplace pensions
  3. technology
  4. lighter touch legislation

The synthesis is simple. Guidance is the ante-chamber for Advice. Many could benefit from guidance and choose to enter the temple of the holy of holies – where sits the IFA on his gilded throne.

throne 3

But even those who do not enter into the inner sanctum will get the benefits of guidance, leading them to take exactly the decisions that the ILC see as making all the difference.


throne 4

Alternative thrones are available



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Let’s call time on the 8%pa anchor (the lure of the mini-bond)

Screenshot 2019-11-28 at 06.55.41

8’s – not a magic number

Mini-bonds –  who needs them – who loves them? Why do they exist?

They exist to line the pockets of people who find easy money in our yearning for 8% interest on our money. Where does this desire come from? It comes from the days when UK Government bonds carried a yield of 5%. Today yields are less than 1% but people are still “anchored” in their way of thinking , they still think that with a bit of ingenuity, a return of 8 or 9% is achievable – and what is more dangerous, they feel entitled to it.

So when someone without a moral compass comes along and tells them that they can invest in a bond that yields 8 or 9% , which can sit in an ISA , they want to believe. Which makes convincing people it can be done an awful lot easier.

The collapse of London Capital & Finance (LC&F), in January this year, was one of the grislier events in financial services during 2019.

The Tunbridge Wells-based firm had issued unregulated “mini-bonds” worth £237m to 11,600 investors lured in by the promise of 8% interest rates. Those investors are likely to have lost most of their money.

8’s – not a magic number.

LC&F – An existential threat to your career at the FCA?

This time last year, Andrew Bailey, the big boss at the FCA was being lined up to be the next Governor of the Bank of England, he’s still second favourite behind Minouche Shafiq (at 14/5) but LC&F happening on his watch – did him no favours.

This might explain why the FCA are being unusually pro-active in banning the promotion of similar mini-bonds in the first-quarter ISA selling season.

I am being tad harsh on the FCA here as their hands are tied (to an extent) by what they call their “regulatory perimetre”. They cannot regulate what sits within the mini-bond and call out the kind of chicanery going on at LC&F which invested in no-hope companies like London Oil & Gas which was leaking money back to the people running LC&F.  That relationship is now the subject of a fraud inquiry.

The FCA can regulate the financial promotions used to get ordinary people to see speculative investments as the equivalent of that building society account we held in the “good old days.

Which is what the FCA should do and are doing. Why I remain sceptical that the FCA has turned a corner, is that there are still too many financial promotions that pop on our devices , that tell us financial impossibilities.



It’s the way you sell’em

Were I to issue a mini-bond backed by AgeWage, my own company  you would rightly point to the real chance that AgeWage will not be around in thee years, there being no secondary market for the shares and for our company only having recently received its first trading revenue. But I could point to my company having a market cap of just under £4m.

You would be right on all accounts, though the claims of many min-bonds are based on the same speculation that gets crowd-funders to invest through platforms like Seedrs and Crowdcube in businesses like mine.

The difference is about promotion, as Frank almost says


“it’s the way you sell’em”

The problem is with us – not them!

There have been successful mini-bonds , launched by organisations like John Lewis and a number of sports clubs.

If people invest for as a supporter, as a charitable giver or even to support the aims of an organisation such as John Lewis, mini-bonds can attract the kind of crowd-sourced capital that does good things. I’ve written on this blog about the social value of Zopa for the same reason

If you look carefully at this promotion fo LC&F, it is positioned against Zopa.


But while Zopa explains the nature of its business and the risks attached to that 4%, L&CF never did.

Instead it used that magic anchor of 8% to make plausible it’s financial impossibility

If we are ever to rid ourselves of the menace of  8% promises, we are going to have to get people to think long and hard about why they still cling to the 8% dream.

We have to get people thinking about that simple but difficult idea of the “real return”, the return on our money that beats cash. Cash returns right now are not giving real returns, nor was 8% if interest rates were at 10% and inflation higher than that.

The world has moved on, but many of us are still anchored in a world of 8% returns. It’s nostalgic, unrealistic and very dangerous.

What the FCA need to be doing , as part of their duties, is promoting financial realism, helping people to understand that a risk-free return of 8% is a financial impossibility and that achieving a return of 1 or 2% in today’s climate, is not failure.

The problem is with us – without our behavioural bias’ , the crooks cannot win.

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What hope should WASPI take from political promises?

A very complex issue

This is not a blog about the rights or wrongs of WASPI, it is simply a statement about party political promises to women in  the UK , born in the nineteen fifties. Their case is made well in the article behind this link.

I’m concerned that many women are being given false hope about pension recompense by Parties who can promise much prior to an election, and deliver little after one.

If you want to properly understand the complexity for and against WASPI , I would recommend the Government’s own 63 page briefing paper “State Pension Age Briefing for women born in the 1950’s”.

If you haven’t time for that and want a simple timeline of how we got to where we are now , here it is

Screenshot 2019-11-24 at 09.57.26.png

What is going on in politics?

Both the LibDem and Labour manifestos are clear that if they are in power in the next term, they will seek to recompense  women born in the 1950s for pension payments

The Liberal promise they will

“Ensure that the women born in the 1950s are properly compensated for the failure of government to properly notify them of changes to the state pension age, in line with the recommendations of the parliamentary ombudsman?”

Labour’s manifesto  promise is noisier and  less specific to the ombudsman’s recommendations.

Under the Tories, 400,000 pensioners  have been pushed into poverty and a generation of women born in the 1950s have had their pension age changed without fair notification.

This betrayal left millions of women with no time to make alternative plans– with sometimes devastating personal consequences.

Labour recognises this injustice, and will work with these women to design
a system of recompense for the losses and insecurity they have suffered.

We will ensure that such an injustice can never happen again by legislating
to prevent accrued rights to the state pension from being changed.

Either way, women born in the 1950s have a reasonable hope of recompense under a Liberal and Labour Government but no guarantee of what (despite John Mcdonnell’s statements to the Guardian- see below).

Since I began this much enlarged blog , the Conservatives have published  their   manifesto. It makes no  commitment to the  WASPI  women but we can suppose that this assessment of the situation by Conservative MP Maria Caulfield, represents the house view. Writing on her Facebook page she says

The Parliamentary and Health Services Ombudsman (PHSO) has contacted me to say it has selected six complaints about the state pension age that will act as lead cases to set a precedent for thousands of others.

The six cases were selected for a preliminary enquiry, which the PHSO said would determine whether or not to investigate the claims further and which could potentially force the Government to intervene and support all women affected by the changes to their pension age.

These cases were brought to the Independent Case Examiner (ICE), the second stage in the Department for Work and Pensions’ two-tier complaints process, by women unhappy about the recent increase to their state pension age.

The PHSO has now decided to step in and deal with this issue, as progress on handling the complaints proved slow.

The PHSO has used a broad generic scope obtained from the six cases for the purpose of their investigation and if they find in favour could have positive implications for all affected.

Manifesto promises – trumped by the need for votes?

There has been plenty of talk in the media (including the BBC) about Labour promising full recompense to WASPI women. It turns out to be true.

When I originally wrote this blog, I took the Labour manifesto at its word – that it would work with affected women towards an acceptable resolution. I had assumed it would be guided by the Parliamentary Ombudsman.

But that promise has been trumped by John McDonnell’s statement overnight.

Screenshot 2019-11-24 at 08.41.27.png

As you will see from the numbers below £58bn is almost double the net savings to the DWP of the changes introduced in 2011 and maybe three times the impact of the 2011 changes on women (men are bearing much of the brunt).

Labour is pledging to pay all women born in the 1950s for any pension income they may have lost when the men’s and women’s state pension age was equalised – in stages beginning in 2010 – following an act of Parliament in 1995.

“All women” includes  the Rothschild women

I agree with John Ralfe  who says the money would be far better targeted at those who were hit when the timeframe to equalise the gap was accelerated in 2011 – a far smaller cohort.

John argues that it would be sensible to means-test the funding, so it can go to those who suffered hardship when the changes were put in place. I agree with that as well

But Labour’s policy is all-encompassing.

Thanks to Suzy Albright for this chart that shows who will be Labour’s biggest winners.

Labour proposal

The party says that, as all women paid in, all women should get out and as “a one-off historical redress for a historical wrong… the state will be expected to find the money”.

Not only is this pledge unfunded (see previous blog), but it amounts to the kind of electoral bribe that brings the parliamentary system into disrepute.

Scottish Grannies will be cheering!

When you look at the geographic distribution of the 3.7m women affected , you can see that they are not evenly distributed, they are very over represented in Scotland, where Labour were wiped in 2016.

The compensation is based on misinformation to women between 1993 when Kenneth Clarke first announced the intention to equalise state pension ages till the implementation of the 2011 Pensions Act. Earlier this year the High Court ruled that women had not been misinformed.

Flying in the face of the law

This precipitative proposal from Labour is not in its manifesto, pre-empts the Parliamentary Ombudsman’s findings and is based on a premise that in October was dismissed by the High Court. The court ruling is behind this link.

Jack Dromey, shadow pensions minister , responded to the High Court ruling , stated that his party would continue to support the WASPI women, but (as the manifesto has it) by talking with them not over-ruling the law.

As Jo Cumbo points out, John McDonnell chooses to over rule this verdict and the law.

I cannot see the point of having a High Court or a Parliamentary Ombudsman, if politicians decide to make it up as they go along – regardless of the institutes of Government they are supposed to respect. WE HAVE BEEN HERE BEFORE as Boris Johnson will know very well.

Should WASPI women really trust this promise or its bearer?

Shouldn’t we focus redress on the 2011 changes?

The briefing on WASPI issued to MPS shows just how complicated and expensive full restitution would be.

Let’s start by using the briefing’s estimates of the number of women affected. It’s important to remember that though women have suffered more, men too are suffering.

Screenshot 2019-11-24 at 07.15.02

From this you can see that the dark green bar (women) have been affected since 2016 but that the numbers impacted increase sharply over the term of the next parliament so that by the end of the term over 3.7m women will be impacted.

Screenshot 2019-11-24 at 07.16.28

Now let’s look at the savings the DWP are making over the next parliamentary term and we can see that women and men get less spent on them , but that women are most impacted by the changes, especially if we look backwards.

In terms of numbers, the savings look like this

Screenshot 2019-11-24 at 07.17.10

The total nest savings of the 2011 changes amount to just over £30bn but the pension changes save the DWP £34bn, the majority over the term of the next parliament.

The £58bn is rather hgher than the DWP’s savings and women are only partly the losers.

Women will bear well over half of the cuts in benefits and the revenue will benefit from women staying in the workforce longer (through increased income tax and national insurance receipts).

Does Labour know what it is talking about on pensions?

While the Liberal’s statement is responsible and grounded, the Labour proposals are simply misinformed.

£58bn is more than this country can afford , it is based on a politicised view of history and will put most of the money in the hands of people who do not need it. If we redress all women, we will need to redress all men and wind back the program of a regressive state pension age which until now, seemed to have had cross-bench consent.

Just what Labour means by designing a system of recompense is unclear and for all the sound and fury , it may signify nothing.

A failure of Government perhaps.

From this brief  look at the numbers , people should be clear that women have had less given and more taken by the state and that Government knew all about this in 2011.

The general population of people moving into retirement around now, clearly weren’t as aware as they could have been of the changes in state pensions age, but this information was open to all parties and (other than a minor amendment).

Whatever the shortfalls in awareness, the opposition parties seem to have been quiet on what is now being called a “betrayal” by Labour and a “failure of Government” by Liberals.

The changes were first muted in 1993, enacted in 1995 and extended in 2011. This period included period when conservatives were in power, Labour were in power and a period when Liberals and Conservatives jointly governed.

The matter is therefore not so much party-political but a matter of good or bad government, which is why it is now in the hands of the parliamentary ombudsman.

But why not leave that to the Parliamentary Ombudsman?

I would warn WASPI against the hope of getting  “recompense for the losses and insecurity they have suffered”.

There is nothing in the Labour Party manifesto stating how much this recompense would be or from where the money would be found. Like the cap on increases of state pension ages beyond 66 (for men and women), there is no mention of the impact of the promise on the public purse.

I would not put my trust in un costed promise, especially when the Labour party have costed so much else. I would expect no more from the Liberals than support for the Parliamentary Ombudsman.

The simple conclusion we can draw is that all parties should wait to hear from the Parliamentary Ombudsman and I would be surprised if any went beyond its recommendations. The new plan put forward by John McDonnell smacks of political expediency (vote grabbing) and is not to be trusted.

There is no “victimless” £58bn giveaway

£58bn could better be spent saving our climate for future generations. Labour’s giveaway is a wealth transfer to the baby boomers.

Expect it to fall badly with millennials

The best that the WASPI women can get out of these manifesto promises is that there is political will among what are likely to be minority or opposition parties, to press for whatever the Ombudsman offers. As for the Conservatives, Guido is bang on the money, if you’ve got it – you’ll keep it

As Maria Caulfield puts it manifestos “have positive implications for all affected”.


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So what do pension people want from politicians?

I’ve started so I’ll finish, I will post my views on the Conservative manifesto from a pensions perspective, when it gets published. But as I didn’t have to waste many words on the Liberal policy pleasantary  afterthought, I’d look into what it is that pensions people feel are our priorities.

Professional Pensions do a spot-check on their readership called Pension Buzz which has just asked this question

Screenshot 2019-11-23 at 06.14.43

What we don’t want…

This is educational for everyone. Maybe Professional Pensions’ readers are no longer involved in DB plans and have given up on the issue, but it is surprising that DB funding was considered a political priority by only one in twenty five readers and that the issue of DB consolidation didn’t appear in the top 8. The White Paper on DB is clearly not on the top of pension professionals reading lists.

It is not surprising that CDC is not a high priority, no-one has yet articulated a compelling case for expanding CDC beyond Royal Mail ( I don’t count my blogs as a major contribution to the debate – sadly).

It is surprising that the future of advice and guidance is not a priority, especially with the mess that MAPS finds itself in. The Pensions Dashboard is perhaps the proxy, but the difficult choices that people retiring “with freedom” today , are facing, is clearly not seen as a political issue.

What we do want….

What is good, is that the net pay anomaly is now in the top-four issues that we’d like addressed. It sits below the question of contribution rates, widening the scope of AE and the future of the triple-lock as the one new entrant into our consciousness.

I suspect that it is the one area of pension taxation that we all feel as one about and – despite the feeble support of the PLSA, PMI and co, it is becoming a popular issue, at least in our bubble.

We want fairness, we want what we do to be sustainable and not be dragged down by scandal and we see the net pay anomaly as something that threatens the gains made in the past eight years through auto-enrolment.

We also want to see our Pension Bill back

Screenshot 2019-11-23 at 06.15.54

I’d call that a ringing endorsement for pension dashboards and a quiet acceptance that CDC is right for Royal Mail, I don’t hear much clamour for increasing tPR’s powers but it’s clear that we want some means to improve pensions – our pensions bill.

If I had seen a stronger clamour for action on DB consolidation, I might have interpreted some of the “No’s” and “Don’t knows” as wanting an expanded pensions bill, but I suspect there is a hardcore of opposition to change that we see everywhere, and a large number of people who are interested in pensions but not the politics of pensions (which is fair enough).

What will we get?

From Labour we got 1970s pensions as part of a 1970s manifesto. Pension pledges that addressed the needs of the 4% who find the future of DB critically important.

From the Liberals we got the 2016 manifesto promises without the review of tax-relief and with no engagement with the nitty-gritty. Frankly we got nothing.

From the Conservatives we will – I assume – get some kind of continuity, which will please the 63% of us who want to see the Pensions Bill back and progress towards dashboards, CDC and the ongoing agenda to widen the scope and funding of AE workplace pensions.

While I have little time for much the Conservatives are doing elsewhere, they are at least a party which is living in today’s world and paying some attention to the problems of ordinary savers. In Guy Opperman, they have had a pensions minister who has been wholely committed to his job. He is not universally popular within his department (as Webb was) but he is at least getting the job done.

The Conservative agenda may not yet have been published, but it looks closest aligned to the readership of Professional Pensions, and – as much as we can take that readership as a proxy for pension professionals, we have to put our weight behind the Tories – at least as far a pensions go.

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Why are pensions Labour’s sacred cow?

sacred cow.jpeg


Yesterday the Labour Party published a radical manifesto designed , among other things, to address inequality in British society by redistributing from those who have to those who haven’t.

Hardly an area of British life would be untouched by this manifesto. If it  was adopted after a Labour majority, we would see radical changes in matters as diverse as public ownership, tuition fees and funding of the NHS.

The 83bn GDP cost of improving services to the general public will be met from extra taxes on high earners and business.

And yet the 40bn GDP cost of pension tax relief has not been put under any threat of change.  Why are pensions Labour’s sacred cow?

The sacred cow is public sector pensions

To understand Labour’s failure to get to terms with the inequality of pension tax relief distribution , you need to think people not policy. The Labour party’s policy is dominated by unions – Unison, the public sector union and Unite. 

These unions, not only dominates union pension policy, they control Labour policy and they are  driven by an almost messianic commitment to preserve public sector pensions whether funded or unfunded.

Any radical policy that undermines the principal of member rights to a defined benefit is  squashed by Unison and by the Labour party’s powerful union lobby.

sacred cow


Of course we can have radical pension policies which reinforce public sector pensions.

The manifesto pledge to freeze increases in the State Retirement Age at 66, should be paid for by some kind of levy on public and private pensions but appears to be uncosted and so a pass-on to future generations

Similarly , improvements to benefits to pensioners

What then for the private sector?

While public sector pensions, state pensions and pensioner benefits are preserved or improved, the private sector are set to be squeezed by pension policy.

What for the sponsors of workplace pensions?

In sharp contrast to the protectionism in the rest of the document, private sector workplace pensions seem set for more reform with the focus being on the costs to employers of workplace pension contributions.

There are cryptic references in the costings section of the manifesto to a 10 per cent contribution rate assumed on wages – P 11.

Hourly rates have been adjusted to factor in 10% pension contributions for staff 

While these proposals are sketched in to policy, the big proposal is to set up an independent Pensions’ Commission – modelled on the Low Pay Commission – to recommend target levels for workplace pension.

One can only assume that 10 per cent is the imputed future employer contribution rate for auto-enrolled pensions.

What for the ordinary saver?

There is nothing in the manifesto of comfort to DC savers who appear to be “off -radar”.

The only reference to consumer protections is against ‘rip-off auto enrolment schemes’. Workplace pensions have just gone through the master trust authorisation process and are under intense scrutiny when GPPs. Where are these rip-off AE schemes?

It is as if the Labour party knows nothing about what is actually happening to the vast majority of UK retirement savers.

This is precisely what you would expect from a pension policy team – so dominated by unions and so under-represented by anyone from the private sector. There is nothing here for the ordinary person who does not have the good fortune to be in a union-dominated collective pension scheme.

In short, the private sector gets the stick, the public sector gets the carrot.

And it’s very short on detail…

There are a few passing nods to the detail of pensions policy. Labour supports CDC – so long as they are for  “Royal Mail and similar schemes” …. similar schemes?

Labour supports a single (state controlled) dashboard.  Labour will continue to push for transparency on cost and charges.

But when it comes to less fashionable policy items, such as the fate of the 1.7m employees, enrolled into workplace pensions but getting none of the promised 25 per cent rebate on their pension contributions – nothing. This doesn’t even make it into the remit of the Pensions Commission.

It is as is anything that might upset the status quo on public sector pensions [where most of the net pay scandal is going on, is out of bounds.

I am sorry to say it, but the Labour party appears to be feather bedding their own  and excluding  anyone who isn’t in the Union pension corral from the fun.

And what is left…?

Left in if you are in the public sector, left out if you aren’t – the politics of the left show little sympathy for pension funds.

The PLSA have thrown their hands up in horror over the impact on DB funding of Labour’s privatisation plans. DC pension growth could be stunted by the planned taxes on dividends and it looks like pensions will become an employer tax under a future Labour Government.

What is left out – of this manifesto – is any attempt to get to grips with the glaring inequality  of the distribution of pensions tax relief

2/3rds of tax relief paid out by Govt goes to higher rates taxpayers, despite only representing 1/4 of the people claiming it

What is the left but a way of correcting such inequalities?

And what is left of Labour’s pension policy without a strategy to correct this issue?

I would argue that the Labour Party’s pension manifesto is a sop to the unions, an affront to the private sector and that it presents a bill to future generations so that the cosy status quo that prevails today, can persist.

It reinforces the very real inequalities between public sector and private sector pensions and does nothing to address the fundamental unfairness of pension taxation.

farmer and the cowboy

Enter a caption




What the Labour manifesto says on pensions

People work hard for most of their lives
and deserve a decent retirement free of
financial stress and insecurity.
Under the Tories, 400,000 pensioners
have been pushed into poverty and
a generation of women born in the
1950s have had their pension age
changed without fair notification.
This betrayal left millions of women
with no time to make alternative plans
– with sometimes devastating personal

Labour recognises this injustice, and
will work with these women to design
a system of recompense for the losses
and insecurity they have suffered.
We will ensure that such an injustice
can never happen again by legislating
to prevent accrued rights to the state
pension from being changed.

The Conservatives have repeatedly
raised the state pension age despite
overseeing a decline in life expectancy.
Labour will abandon the Tories’ plans
to raise the State Pension Age, leaving
it at 66. We will review retirement ages
for physically arduous and stressful
occupations, including shift workers,
in the public and private sectors.

We will maintain the ‘triple lock’ and
guarantee the Winter Fuel Payment,
free TV licences and free bus passes
as universal benefits.

Thanks to automatic enrolment,
which was introduced by the last
Labour government, record numbers
of employees are now in workplace
pension schemes. But too many
people are still not saving enough
for a comfortable retirement.

We will stop people being auto-enrolled
into rip-off schemes and seek to
widen and expand access for more
low-income and self-employed workers.

We will establish an independent
Pensions’ Commission, modelled on the
Low Pay Commission, to recommend
target levels for workplace pensions.
We will create a single, comprehensive
and publicly run pensions dashboard
that is fully transparent, including
information about costs and charges.
We will legislate to allow the CWU/Royal Mail agreement for a collective
pension scheme to proceed and allow
similar schemes.

Labour has listened to the NUM and
in government will end the injustice of
the state taking 50% of the surplus in
the Mineworkers’ Pension Scheme and
introduce new sharing arrangements
so that 10% goes to government and
90% stays with scheme members.



This new sharing arrangement will
also apply to the British Coal Staff
Superannuation Scheme.
We will ensure that the pensions of UK
citizens living overseas rise in line with
pensions in Britain.

Pensions in the costings document which accompanies  the manifesto

Restore pension credit for mixed aged couples

WP Research and Analysis briefing ‘Mixed age couples: benefit impacts of ending access to Pension Credit and pension age Housing Benefit’ (updated April 2019) gives the estimated saving from implementing this policy as:

Screenshot 2019-11-22 at 07.48.10

Screenshot 2019-11-22 at 07.48.25
This figure was estimated by the House of Commons Library by taking the total expenditure on frozen pensions in 2018-19 and applying the Office of Budget Responsibility’s annual ‘triple lock’ uprating forecast to each of the following years.

Calculations are based on DWP Benefit Expenditure and Caseload Tables, DWP Stat-Xplore State Pension dataset and the OBR Economic and Fiscal Outlook March 2019.

Posted in pensions | 9 Comments

Phoney NIC “giveaways” that penalise the poor

johnson derisk

Boris Johnson had better not sell me a reduction in my national insurance contributions as an incentive to the poor.

His jump the gun announcement ahead of the manifesto was made up as it went along with all the wrong numbers. But worse – much worse – is the intent of Johnson and his party to fool us into thinking this is an “incentive’ for the poor. The proposals won’t help the self-employed or the elderly

and it will benefit the likes of Tory membership card holding me, much more than the hard-working families that Johnson is sucking up to

So let’s not pretend that this is going to target those who need extra money in their purses. This is going to benefit the people who have the internet bank accounts and are prospering.

Here is the IFS’ Xu summing the proposed giveaway up

‘If the intention is to help the lowest-paid, raising the NICs threshold is an extremely blunt instrument. Less than 10% of the total gains from raising NICs thresholds accrue to the poorest fifth of working households. The government could target low-earning families much more effectively by raising in-work benefits, which would deliver far higher benefits to the lowest-paid for a fraction of the cost.’


Or pay them back their overpaid pension contributions

The fate of 1.7m pension savers who are currently paying 25% too much in pension contributions is being ignored.

If Boris Johnson really wanted to help those at the bottom end of the income scale , he would alleviate the burden of them having to pay 5 rather than 4 per cent minimum contribution levels to stay in a workplace pension.

Labour little better

And shamefully , it is not just the Conservatives who are ignoring the “net-pay pension  rip-off”.

Instead , Labour is pledging various pension commissions to look into matters. They will no doubt find, what this bog has telling them for four years, that the poor are getting a bad deal out of net- pay pensions and no-one cares.

The cost of sorting the net pay anomaly grows, no doubt by the time we get around to trying to do so, we will find that the backdated payment of the promised incentive has become a fiscal obstacle.

Each month that goes past means another month of those who can’t afford to- paying too much into their pensions and as time goes by, the likelihood of this being put on a proper footing grows less.

The Liberals have also toned down the tone of their pensions manifesto, abandoning reform of pension taxation altogether,

Since Conservatives -Labour and Liberals  all seem to be in pre-election giveaway mode, it is source of cross-party shame that this ludicrous situation is allowed to persist.



Posted in pensions | 2 Comments

So how did our pension taxes do?

Screenshot 2019-11-20 at 07.25.47.png

The irate Tristan Hawthone

Tristan Hawthorne is right to rail against the IFS (and the BBC) for lumping pension contributions into the “taxes” box on our payslip. Here’s the offending statement which appeared on the BBC website

The taxes that many of us are most aware of are income tax and National Insurance contributions (NICs).

These are the sums of money on a payslip that never reach our bank account, along with pension contributions or student loan repayments.

Together, they account for the majority of revenue collected in the UK.

Here’s that  tax “grab in a graph”

Screenshot 2019-11-20 at 06.27.16.png

numbers without pensions and student loans

And here’s Tristan’s vivid riposte

“For those of us in the benefits industry this is misleading at best and at worst worryingly inaccurate”.

One of my preoccupations is trying to find ways of getting ordinary people to think about the abstract concept of saving for retirement, putting money away for a rainy day and I wonder whether the idea of a “voluntary tax” isn’t such a bad one.

Obviously the reason we don’t like paying taxes is that it leaves us less to manage on when we pay our bills, but put the word “tax” in the title of a blog, and a lot of people will press the link, because we get “tax”. We understand the link between the amount we pay in tax and the level of public service we get.

When I pay 20% VAT on my burger, I accept that that is an amount that will go towards mending the roads that the burger van will drive to deliver tomorrow’s burger. There is a performance target that I expect for my money and that is to have my burger delivered on time (make up your personal targets in your own time).

With pensions it’s a little different

But with pensions it is a little different. We sort of know that our national insurance is buying us rights to benefits if something goes wrong and an income in later life which should keep us off the streets. We kind of know – if we’re in a defined benefit scheme that our pension deduction buys us a share of our final or average salary at some date in the future.

Where things come apart is when we mix up saving into a pension pot with a tax, because pension pots are – as Tristan says – just a kind of very inaccessible bank account and the amount in that account is determined not by some unseen actuary in the sky, but by how you did.

This is why Tristan goes off on one.

Since pension freedoms came in, DC can pretty much act like an ISA, except with different tax treatment, once you are age 55.

You can access as much or as little as you want, as an income or as a lump sum. It is literally your money, in a segregated investment account. While very few people would ever do so or would be advised to do so, you could place all that money into cash at age 55 and it would almost act like a bank account.

So again, it is deeply misleading to the point of inaccurate to claim that pension contributions never reach your bank account. In the case of DC it is almost a bank account in the first place!

Now let’s be clear about this, people generally do see a payslip deduction as a “tax” , Paul Johnson who wrote the paragraph that offended Tristan is right about that.

People do get to spend their pension savings – either tax-free or after tax, and they buy real things.

People get workplace pensions as a voluntary tax-grab and they kind of know that that money comes back to them.

What they don’t know, and this is where the pensions industry makes its money, is what happens in the middle.

Paul Lewis’ wealth or pension tax

Paul Lewis talks about pension taxation not in terms of what the Government takes (it takes very little of the money as it grows) but in terms of the taxes the private sector take on your money.

This kind of pension tax is levied through very small charges which add up to an amount that can erode your pension “bank balance” by up to a third. You might think it impossible that a 1% pa charge on your savings can lead to a pension tax on your final balance of 30% but that is what the maths says and the maths doesn’t lie.

But simply looking at the cost of pension pot management in terms of cost is stupid, all that tax on your savings pays for something, just as VAT and national insurance and income tax pay for something.

They pay for the value you get out of all this pension saving.

The value you get from pension saving is a reward for putting the money away for a long time and not touching. It’s a reward for patience and it’s given you by the people who benefit from your money. In economics terms it’s what you get from patient capital.

We have a right to know what this reward is and whether the people who have managed our pot have given our fair shares. We have a right to know how our savings have done, and if we want to use the phrase Tristan hates, we have a right to know how our pension tax has done.

But we don’t get the right to know how our savings have done

While pension providers have become very expert in taking money off us via payroll taxes, and are increasingly good at giving back to us using pension freedoms, what happens in the middle remains a mystery.

We don’t know what happens to our money and we don’t know how our savings are rewarded , we don’t even know how much we are paying third parties to look after our money.

Which is shocking!

Instead we get a whole lot of paper we don’t read with graphs and tables that describe what has happened to funds and strategies, none of which is directly applicable to us.

We simply don’t get a statement on how our money had done and certainly not a meaningful statement on how we’ve done compared to everyone else.

When I look at that chart (scroll up) at the top of this blog, I see that about 35% of my money is paid to the Government to look after me. Reading that, I’m saying – so what.

I want to know what that 35% means compared to other countries, other Government tax-grabs. Fortunately, those numbers are to hand

Screenshot 2019-11-20 at 07.04.54.png

Which makes me feel a little more comfortable, so long as I am an average citizen. Then I ask myself what being an average citizen mean and I discover that actually the average person on £28,000 a year is doing very well against the average person abroad but that the rich person is doing about average

Screenshot 2019-11-20 at 07.08.17.png

I hope that like me, you find these charts compelling. They would be even more compelling if I could put in my and my partner’s income and compare ourselves individually.

But we recognise that working out the value we get from our tax is a lot harder than working out the tax we pay. So economists and tax-payers call it a day about now. Because we know that we will never quite know whether we are getting individual value for money and are prepared to accept we are part of a collective set up.

Why DC is different

But back to the bank account and Tristan. Tristan is fundamentally right. Taxing people to build up a private pension pot is just a way of paying people later and is quite different from paying into one big pot from which Defined Benefit pensions are paid out.

DC is different because we get to see the fruits of our savings as a bank account as we go along and as a spendable bank account from aged 55.

Whereas we can’t really get granular about how our taxes have done and demand “hypothecation” of our taxes paid, we can get super-granular about this pension tax into our DC pot.

We can and should be able to see where our money is going, what it did (good and ill) and what reward we got for waiting for it to come back to us. We should also be able to find out how much of our money was paid to the people who looked after it for us.

We should not have this information passed to us in an abstract way – as “performance”, that is the old lazy way of governance – founded in DB reporting. We should instead have this information given to us as a score telling us -as Experian tells us- how we’re doing relative to everyone else.

Which is what AgeWage is doing, and is why AgeWage is going to be so important to us in the years ahead.

agewage evolve 1



My word press functionality isn’t working properly this morning  – forgive the unusual headers and other formatting anomalies


Posted in pensions | 2 Comments

On our front door – the trial of Manita Khuller.

Manita Khuller represented herself in court yesterday taking on  on FNB International, which she claims is responsible for the loss of a £170,000 pension pot.

She is up against lawyers Carey Olsen , originators of the Carey SIPP who are representing FNB International Trustees , a part of South African giant First Rand, which has fingers in a number of British pies, including challenger bank Aldermore, which it bought to get a slice of the £350m of tax-payers money from an RBS sinking fund.

The Trustee Investment was into an offshore bond wrapper offered by Royal Skandia, now part of Old Mutual International, another organisation with a South African heritage and a history of fronting failed investment funds.

Manita Khuller is a single Mum,

manita khuller

She was advised to transfer CETVs from her UK DB Plans when today’s protections weren’t in place (2011) .

Her CETVs were invested into the Plaiderie QROPS advised by Professional Portfolio International in Bangkok, where she was living for a short time.

The destination of her money had provenance, the trustees of Plaiderie are FNB International – part of  First Rand .

First Rand is a household name in South Africa, Guernsey a financial services hub governed by the Guernsey Financial Services Commission with strong links to the FCA.  If she didn’t have enough protection , the bond wrapper was supplied by Royal Skandia which had been bought by Old Mutual in 2006 (and became fully integrated in 2014).

In short, she was being sold a very superior product that had everything about it to trust.

Except that is, the investments.

Manita is an ordinary investor with a ‘moderate’ appetite for risk. But more than half of her pension money – around £170,000 – was put into LM Managed Performance Fund, run by Australian-based LM Investment Management. This company is now in administration, its licence revoked.

It was a risky fund, unregistered with the Australian regulator and invested in a few residential properties on the Gold Coast.

Some advisers had issued warnings about the health of the fund before it collapsed in 2013, dismantling the finances of 4,500 people with more than £200 million invested.

When this fund collapsed, Manita decided to look into her other holdings.

What followed was the discovery that her pension pot, worth more than £300,000, had been split between three high-risk, unregistered funds designed for sophisticated or professional investors.

A quarter of her money had been invested in the Mansion Student Accommodation fund, where her money remains frozen as the fund is being liquidated.

Speaking to the This is Money Manita commented

‘No one with a moderate or low tolerance to investment risk should have had their money put into such funds.’

Then she found out her adviser, Professional Portfolio International (PPI), was not licensed in Thailand

The human cost of the story is told in an excellent article by Laura Shannon in the Mail on Sunday,

But there is another casualty in this, which is the reputation of pension investment which once again takes a battering. We are left wondering

  1. How she lost two guaranteed DB pensions with strong employer covenants
  2. Why PPI continues to operate throughout Asia under MD Eric Jordan
  3. Why Old Mutual and Skandia have yet again been found wrapping dodgy investments
  4. How a South African and now UK bank is owning  a Guernsey Trust in the first place
  5. What Geoff Gavey, Alan Glen and co were doing at FNB international to claim “trusteeship”.

On our front door

Guernsey is a front door to Britain, OMI and First Rand are all very much part of the UK financial services ecosystem.

Manita Khuller is left, fighting her case against the one part of the chain of entities that has let her down – FNB International.

But the others cited above have contributed in different ways to her impoverishment. It seems almost impossible that over a sum so small to these financial behemoths as £170,000, the Royal Court of Guernsey will be sitting over what is in effect a test case.

For Manita, the prospect of losing the case means financial penury, but for FNB and others there is the financial backing of the South African financial services industry and indeed rich parents such as Quilter and First Rand.

This money originated in UK DB pension schemes and has only travelled in trust to Guernsey, but it has been lost through what have every semblance to investment scams.

None of the people directly involved in her story have ceased trading and she now faces the full weight of what the Channel Islands can throw at an investor.

Though she is bringing the case, she will no doubt be put in the dock for “not knowing better”.  It would be nice to think that people now do know better (though there is little evidence for this).

I think it is a disgrace that Manita Khuller is having to go through this. Even more a disgrace that she’s going through it alone . I hope that some of the people I know, involved in the various organisations listed above, will come to their senses and recognise simple concepts such as “fiduciary duties” and the need to “treat customers fairly”.

Thankfully Manita has well-wishers, among them one who sent me details of her predicament. I wish her well.


Posted in advice gap, age wage, pensions | Tagged , , , , , , , , | 2 Comments

“Evolution not revolution” as important for what it omits as what it says.

I finished reading “Evolution not revolution – five years of freedom” sensing something had been missing. That something has just come to me.

No mention of MaPS, TPAS or Pensions Wise.

In its 62 pages , this excellent document does not mention MaPS, TPAS or Pensions Wise. It talks a lot about regulators but it does not mention these “arm’s length bodies a single time.

This is frankly rather more worrying for MaPS than for the “investment firms and selected other industry participants”. A year ago it would have been unthinkable for TPAS not to have contributed to this work. It is a matter of deep regret that in such a short time our public sector guidance function has been so dislocated and downgraded.

The same can be said of the other great pensions publication of 2019, the PLSA’s Retirement Living Standards. It would appear that MaPS has retreated into purdah , not just for the period of the election , but for the first year of its existence. This is deeply regrettable. As Evolution not Revolution points out , the level of  engagement with pension choices in the target group for Pensions Wise and TPAS – the fifty year old +, is poor and the advantage of getting engagement very great.

Unless Ignition House are being selective with the publication of the vox-pops, I haven’t heard a single member of the public refer to MaPS, TPAS or Pensions Wise either.

If the private sector has abandoned MaPS , they are not alone. In my conversation with the FCA chair Charles Randell last summer, I sensed that he saw the future for guidance and advice in the private sector’s grasp. A former pensions minister wrote to me yesterday of MaPS as follows…”That organisation seems to have a death wish.”

This is not me making a cheap political point. It is me bewailing the waste of public money on MaPS, for the value it is currently giving. The cost of MaPS , TPAS and Pensions Wise is currently met by the financial services providers and passed on to savers through the costs they pay for pension management. We are getting poor value for money from MaPS, who are currently out of the pensions loop.

I hope that the pensions minister we have with a new Government will address this issue. MaPS must be accountable to someone, and it’s accountable first to the pensions minister.

No mention of the dashboard either

The pensions dashboard does get a brief mention in Evolution not Revolution but is dismissed for being tomorrow’s tool. This fiercely practical document is looking at what can be done now and accepts that the five year time horizon that most savers and providers are working to, cannot include something that is unlikely to deliver in that period.

Nor mention of collective decumulation

To my sadness, the concept of CDC as a default retirement option to put alongside annuities, drawdown and cash-out, hardly merits a mention. I suspect that this is in part for the stated reasons in the document – that collective decumulation does not cater for the nuances of individual circumstances, but mainly because no proper work has been done to look at CDC as a product that could be adapted for this post pension freedoms world.

The longer that CDC is focussed on the specific issues of Royal Mail, the less relevant it will seem to savers and providers. It is beholden on those who call themselves Friends of CDC to think about how CDC could be made relevant and I urge those like Con Keating, David Pitt-Watson and Kevin Westbroom to reconsider their thinking in the light of this excellent work.

Public and private pension agendas should be as one

Evolution not revolution is a work funded and created by the private sector that informs on public pension policy.

It  presents a very complicated picture of savers sleep-walking into retirement.

It shows how providers have delivered the pension freedoms so far and points out what’s getting in the way of further progress.

It looks at what savers want and finds they want certainty about their savings while gaming their liabilities – health and longevity

Finally it asks penetrating questions about where next for retirement investing.

The breadth and intelligence of its research compliment the work the FCA has been doing on retirement decision making. As I said in yesterday’s blog, the report is neither as rosy or complacent as its title.

But – like the PLSA’s Retirement Standards report, it shows that the private sector is capable of responding to a change in demand intelligently and responsibly.

With the exception of NEST, who participated in the research but did not sponsor the document, the public sector had no part in Evolution not revolution. That is the document’s strength and its weakness

It is the stronger for being able to speak its mind and not the Government’s and it is the weaker because so little of this document concerns itself with what should be the Government’s pension agenda.

To prove my point by exception , there is a paragraph on page 42 where we see how a dashboard might be used to bring state and private pensions together around the PLSA’s retirement targets

Perhaps more worryingly, overall 17% of our survey respondents had no idea how much they would need, rising to 24% amongst the 55-59 year olds.

Members taking part in the depth discussions felt that spending some time thinking about income needs was very useful in framing their future decisions, and that the PLSA’s Retirement Living Standards would provide a very valuable rule of thumb for them to work out their own situation

Consider somebody retiring today. A household with two adults qualifying for the full State Pension will receive nearly £17,600 a year. They would therefore need an extra £2,400 or so of income to meet their basic needs. If they don’t have any final salary pensions or employment income, then it might make sense for them to buy an annuity with their DC savings. Assuming a current annuity rate of around 2.2% for an inflation-linked annuity from age 66 (yes, it really is that low), they would need £112,000.

The document goes on to explore other options than conventional annuities, but this is precisely the framing of the financials that ordinary people need to engage with the tough choices in the strait of Hormuz,

Revolution not evolution

As I wrote yesterday, I don’t think that evolution is enough. The derivation of revolution is from the Latin “to turn around” and the concept of linear development in “evolution”, supposes that we have made progress in pension provision over the past years.

We have of course democratised savings through auto-enrolment and improved the state pension through the triple lock and simplification. But we have lost our private sector DB accrual and with the Freedoms, lost annuities as the default decumulator.

Though we have a much greater challenge in meeting individual needs, I don’t think we should dispense with the tools of the past. The merits of collective DB pensions can be adapted to a DC world and their guarantees inherited through a revitalised annuity market.

Meanwhile , the benefits of digitisation can be brought to pensions through the provision of data at the swipe of a finger. APIs can bring our pension information together – whether the feed be from the state pension , a SIPP or a workplace plan. We will be able to locate , explore and aggregate our pension pots into a retirement plan, underpinned by pensions from state and second tier DB.

These great advances are still to come and depend on the private and public sectors working together. This means both evolving through this new technology and revolving to ideas which seem unfashionable today but worked yesterday.

Evolution not revolution, would be best “evolution and revolution”. Resolution will come from the synthesis of the two.


My view when finishing this morning’s blog

Posted in age wage, dc pensions, defined ambition, defined aspiration, pensions | Tagged , , , , , , , , | 4 Comments

“Five years of freedom” – is evolution enough?

Screenshot 2019-11-15 at 10.02.44.png

The Defined Contribution Investment Forum have commissioned an excellent body of research from Richard Parkin and Ignition House. The result is a packed report running to over 60 pages that provides a new insight on the problems individuals are facing taking decisions at retirement.

My only objection to the report is its title. In the past , DCIF have been firm advocates for radical change , a recent report was entitled “ADAPT OR DIE – THE PENSIONS INDUSTRY NEEDS TO FUNDAMENTALLY RETHINK THE WAY IT COMMUNICATES”

By contrast “Five years of freedom – EVOLUTION NOT REVOLUTION” – doesn’t do justice to the bafflement of the various people who had been interviewed for the project. The digital version of the report – is now on the web. But as I wrote this earlier, you’ll have to make do with my tweets from the report’s launch yesterday.

Five thoughts

1. Pensions used to encourage people to live longer…

2.People are having to game their later life income – their AgeWage.

and they’re realistic about the chances they are taking


3.People want the freedom to get others to do it for them

4.It’s buy now – pay later

5. And what happens if your bet doesn’t pay off?

These aren’t comfortable messages for policy makers and they shouldn’t be comfortable messages for the commercial pension providers and the trustees of the not for profits.


Is Evolution enough?

The Pension Freedoms are revolutionary. They have turned pension planning into wealth management and made a lot of people with inadequate financial resources a false sense of comfort. When confronted with the scrutiny of Ignition House’s interviewers, several of those interviewed cracked, admitting they had no idea what they were doing or what they were to do. I nearly cried when one man of my age put his hands up and told the camera he hadn’t done any planning.

You could see the fear that gripped him and for him – and those like him – the need for help is urgent and acute. Telling him that – five years into the pension freedoms – advice and guidance is evolving , isn’t enough. The study found – as the FCA has found – that the best plan for most without one, is to scrape out whatever tax free cash is available and wait till a better idea came along.

For such people, even the proposed solutions being put forward by providers look inadequate. Two thirds of providers now offer advice as part of the service

But at what price?

Advice cost

What is the revolutionary conclusion?

When Jeanette Weir of Ignition House was asked what her key insight was from the research she had conducted, she said she was shocked by the ignorance of the people she talked to.

This is reflected by the title of the first chapter of the report “sleep-walking into retirement”. I think this would have made a better title for the report than the one chosen.

I have yet to read the report in detail, but have a day off today so I will. I doubt that by this time tomorrow , my opinion will have changed.

DC plans are not currently fit for the purpose of converting people’s retirement savings into a retirement plan. That may be partly because the pots are too small, but there are plenty of six figure pots that remain invested – often in unsuitable life-styled investment strategies, because of lack of product innovation.

There is no default option into which people can transfer their money and get paid an income, other than an annuity. For many “annuity” is still the right answer but for the majority of people who want more for their savings than insurers can guarantee, we need some kind of wage for life solution where the income lasts as long as the saver.

My revolutionary conclusion is that the current choices are not enough, we need a pension option which keeps people invested in real assets and provides mortality pooling. Brilliant as this report is – it points towards there being no evolutionary answer to the pension freedoms.

The inevitable conclusion from reading this report is that – at least from retirement – CDC is the inevitable solution – revolutionary as it is.


Posted in advice gap, age wage, CDC, pensions | Tagged , , , , , , , , | 3 Comments

MAPS frustrate


It’s been a frustrating year for the Money and Pensions Service – MAPS and for businesses that hoped to work with it.

When John Govett was revealed as its new CEO this time last year, I wrote confidently of the Government’s opportunity to build on the success of TPAS and offer ordinary people the help they needed to make the difficult retirement decisions in the Strait of Hormuz.

John Govett was a disappointment; he retreated “for family reasons” from the responsibilities he’d taken up only a few months before and since then Caroline Siarkiewicz has been interim CEO while Chairman Hector finds someone big enough to fill her predecessor’s boots. 

Since the appointment of a new CEO is the matter for the Pensions Minister, it will not be till after the election that we will hear who takes MAPS forward.

I met Caroline yesterday afternoon for a meeting I’d long anticipated. Sadly the meeting was delayed , truncated and relocated from MAPS’ swanky HQ to a local coffee shop but it did at least get me back to where I was in Q1 with Govett.

We expect the publication of MAPS strategic plan – which has been a year in the making – and should be published this month. I sensed that there was some flexibility in Caroline’s expectations of what this month means.

I was proved right only an hour after publishing

Screenshot 2019-11-14 at 10.16.54.png

The current hiatus , caused by there being no permanent leader and no strategic plan is worsened by MAPS having now pensions policy person . Indeed – TPAS’ capacity to educate and stimulate has diminished – its social media output is a trickle and though Pensions Wise is getting a consistent TV campaign the P in MAPS is getting smaller, perhaps they should rebrand MApS.

I cannot find MAPS on Instagram. MAS has some presence on Facebook, This is the last tweet MAPS produced. I admit to not having the eyesight to read it – I guess the tweet is a blind spot…

Whatever MAPS is up to- it’s not getting it’s message out there.

We are only five days from MAPS “money and lets talk pensions week” – I’m glad that the Renfrewshire knew about it, I certainly didn’t

Google MAPS – where’s the MAP?

I wanted to get an idea of how prominent MAPS is in the world of search engine optimisation.

Google “MAPS” and this is what you get.

Screenshot 2019-11-14 at 06.50.32.png

MAPS isn’t on the map, even on the google map and when you want to google the “money and pensios service”, you get this guy.

Caroline 5

I have the greatest respect for the Renfrewshire Affordable Credit Alliance. They have trumped MAPS to become the acceptable face of Talk Money Week. Crazy guy – crazy image – it’s an Instagram classic.

MAPS’ frustrated – frustrated by MAPS

I left my meeting with Caroline as frustrated as she must be. My offer to work with MAPS was greeted with the suggestion that we might begin to do so when we stopped being a start up – presumably some time after MAPS gets going again after its year off.

If anything sums up MAPS, it’s this image, clipped from a presentation earlier this year, that looks at MAPS’ own governance structure. MAPS may see this as an example of sound governance – I see it as hopelessly overloaded with committees – strangled by bureaucracy

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It must be very frustrating for MAPS to have to look at an organisation such as AgeWage which is trying to help it achieve its aim in terms of risk. It must be very disheartening working in a place which has become such a backwater that this article will probably be the most socialised content it gets in November.

Still more frustrating because the person who made TPAS famous has been made about as welcome in MAPS as I was.

Are MAPS really in listening mode?

Everywhere I look , I see opportunities for MAPS to make its mark. When I finish this blog I will be nipping over Blackfriars Bridge to hear how I can hook my organisation up to the Mum and Gransnet.

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When I’ve met with Mum and Gransnet I asked them how they worked with MAPS. To my amazement – no one in the room had ever heard of MAPS– though they’d heard of TPAS  – some time ago.

Between them Mum and Gransnet host the eyes and ears of over 10m Brits a month, most of them are the Es, D’s and C’s who MAPS needs to reach out to.

One person in the room mentioned that MAPS was probably targeting the A’s and B’s, which is why their paths didn’t cross.

I’d have shared this information with the old TPAS and they would have pressed the invite yourself button and come.

But I didn’t feel it appropriate to suggest to Caroline she came with me to Ogilvy this morning. It would probably have required a risk-assessment for the nearly-new MAPS to decide if this was a suitable input to their information gathering.

MAPS and the dashboard – when I’m 64


MAPS – the Pensions Minister announced – is to be the home of the pension dashboard. The pensions industry welcomed that – the then-new MAPS was being tasked with delivering version one of said dashboard by the end of this year.

We are reaching the end of the year and the expectation has slipped by at least a year. The dashboard steering group is only just getting its feet under the table and the Pensions Bill that would start the mandation of data to the dashboard didn’t make the wash-up.

Whatever emerges in 2020 as dashboard legislation – will not become effective till I’m well into my sixties. When I started planning for the dashboard I was 54- I am 58 now and I don’t expect to see the dashboard fully operative till I am 64.

Frustrated and frustrating

Becalmed and rudderless, MAPS is a bulky containership aground in the gates of the harbour. Until Hector Sants  gets the tugs out , it will continue to block progress.

I feel sorry for Caroline and all aboard who are doing so little with so much resource. We need a strong pensions guidance service in the UK and MAPS should be it.

Let’s hope that as we move towards the end of 2019, we aren’t saying the same things about MAPS in a year’s time.


Posted in advice gap, age wage, DWP, pensions | Tagged , , | Leave a comment

Why we can celebrate 74 years of peace

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Nobody wins wars, the only good thing that can come our of wars is peace and that is what we have  had  for 74 years. That should be celebrated as the lasting memorial of those who gave of themselves in those 30 mad years between 1914 and 1945.


Those of my generation knew of the war from parents who were children and grandparents who were adult – many of whom fought. Those who have chosen to serve in our armed forces have fought and many died but we have had no men conscripted since 1960.

I was born into the world at 10.58 on 11th November 1961, my father was present at my birth, my mother is excused if she broke the silence. My gratitude is to those who have kept peace on these shores in the intervening 58 years.

Yesterday I watched the men and women of the armed forces at the Lord Mayor’s show and applauded them. I was able to return home to a wonderful weekend of sport , time with my family and an opportunity to remember at 11 am today. We are enjoying the peace they gave us.

In the early hours of this morning I watched two men celebrate peace


Why we can celebrate peace.

We can celebrate peace today because we fought for tolerance and achieved a lasting settlement. That settlement has seen people come to our shores first from the Commonwealth, then from Europe and – where they seek refuge – from around the world.

Our nation is part of a global economy which frowns when we assert intolerance. Last week British debt was downgraded by Moodys because world markets see us as better together

We are now an integrated society as we were not in the last century. The diversity we have achieved and are achieving accross sexes, race and creed means that we are less divided inside of Britain and linked to other countries through family work and religion.

I am proud when I worship at my church that the flags of every country where Methodism flourishes are flown from the gallery and people from every country sit beside me in the pews.

We can celebrate peace because those from India and Africa, Germany and Japan are no longer strangers.

Let this peace last

We have given peace a chance and it has been a success. We are a better nation for being a peaceful nation and though many places around the world are still at war, the world is a better place for its great institutions of peace, the UN especially.

Today we can celebrate 74 years of peace and tomorrow I can celebrate 58 years where I did not need to fight as others did for me.

My profound gratitude goes to those who went before and those who serve so that I can live the rest of my life   شاء   in peace.

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Posted in pensions, religion | Tagged , | 1 Comment

“Peace of mind” – the new commodity

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“Peace of mind” is the new commodity that can be sold by anyone, anytime, anywhere – especially if  you are a financial adviser. It’s the talisman of “financial well-being”.

Mercer Money has been designed to support better financial decision making and help improve people’s lives today while giving them peace of mind that their future needs are met.  Corporate Adviser – Mercer launches Financial Well-being Platform

IFAs have an endless stream of customers lining up to get some peace of mind from knowing what they’ve got, The cost of these financial placebos is a wealth tax equivalent to around 25% of the expected growth on a portfolio, which – since it’s taken out of the investment, means that the outcomes are under-performing of necessity. IFAs are living the life of Woodford.

It doesn’t much matter if you are a one man vertically integrated wealth manager or the mighty mercer, you can peddle “peace of mind”.

A trouble shared?


Whether with a wealth manager or the Mercer app we are being asked to share our financial and life goals with third parties

As  Chris Budd puts it on the Ovation website

we encourage our clients to accumulate life with their money, not the other way around

This kind of openness is not for all, especially when the third party is your boss.

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What is on sale here is a kind of hand-holding that I’ve seen people like Chris Budd, Al Rush and Charlie Goodman carrying out quite brilliantly. It is undoubtedly worth it and I’ve no doubt that the good people at Mercer thoroughly believe in their product.


But outcomes matter more..

Show me the value

I’m going to be within two years of being 60 tomorrow and my financial wellbeing is dependent on the outcomes of the money I’ve saved, the defined benefits I’ve accrued and my capacity to carry on working.

The outcomes of my saving matter to me more than mentoring, counselling and goal-setting.

Show me the money.

The money I have now  has been  diminished by the various commissions and fees paid to all the people over the years who I’ve employed to help me to the eve of my 58th year and do you know what, I am not of the view that I got much value for all this advice I paid for or the advice delivered me in the workplace by well-meaning bosses.

To all those who want to sell me “peace of mind”, I can share a piece of my mind. Please don’t patronise me – let me be – and show me the money that I have and how  I can use it to get myself a wage in later age.

I have no idea about the overall cost of all the advisers who’ve had a bit of my later life , even less – of the value I’ve got for this money. It would be great if someone would show me this money.

In one word – I want “accountability”

Will Robbins and Charlie Goodman and I sat down in Citywire’s Vauxhall Walk offices to discuss whether you can really sell “peace of mind” as a financial commodity.

After 50 minutes of passionate debate, I was asked by Will to give one word that would convince me that peace of mind could be sold as it is being sold – as a financial commodity.

That word was on my lips from the moment the discussion started.

If you are prepared to be accountable for my peace of mind – today and tomorrow – you can sell me your capacity to deliver it.

And if you are using “peace of mind” as a hook on which you sell me your services , I demand some evidence that my happy today will translate into a financially secure tomorrow.

Right now – I remain deeply sceptical.

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Posted in pensions | Tagged , , , , | 3 Comments

So what’s this “tough new regulatory environment” for DB pensions?

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That’s tough


Next week I’m on holiday – but I’m not – because I’m doing loads of meetings and moderating a session at the DG DB pensions conference.

What you have to do when you moderate these things is get all the people together on the phone and find out what they want to talk about. Which is what I was doing yesterday, in between doing my day job and messing around with Citywire.

It’s been a whole month since I was working with First Actuarial so I can now call myself an ex-consultant and DB something that I get not advise on.


The purpose of the session I have been asked to moderate is to determine how trusters are responding to the “tough new regulatory environment” which apparently has been put in place by the Pensions Regulator.

Tough new regulatory environment?

Social Purpose

From what I could get off the call, the Pensions Regulator is keen that the Trillion pounds plus in funded DB plans is put to work for good. This means that it helps global and local goals to improve our environment, sustain our planet and reinforces good governance.

If it is tough for trustees and the people they employ to raise their game in these areas then they need to explain why. Frankly it is a challenge that any trustee should relish.


The same could be said for the sustainability of a scheme’s capacity to pay the pensions promised to its members.  DB schemes don’t have the capacity to flex their liabilities, but they can improve the means they have to meet their liabilities by sensibly matching what they have to pay to what they have to pay it with.

If it is tough for trustees, with all the help they get from extra contributions from sponsors and the advice from actuaries on liabilities and advisers on their investments they they need to explain why. Frankly it’s a challenge they have known about for decades and if they find it too tough, they have  no business doing the job. The Pensions Regulator appears to be taking a “shape up or shape out” approach, not before time.

If we see consolidation , it will start with the collapse of trustee boards into sole trusteeship, move on to the pooling of funds and finish with the pooling of liabilities. What little diversity of approach left in DB trusteeship will disappear as schemes conform to the rules of the endgame.

The choices around consolidation will be about how and when , not about whether . The Pensions Regulator has come to bury schemes, not to praise them.


What little has come out of the Competition and Market Authority’s review of DB relates to conflicts between those advising on and those managing schemes. These conflicts when they are the same people and this practice is known as fiduciary management or what other IFAs know as vertical integration.

These conflicts are well known and aren’t going away as the consultants have collared most of the available resource and are determined to eat as much of the pie as they can. The Pension Regulator is trying to manage the conflicts and the consultants are running rings around them as they did the CMA.

Frankly – this is a battle lost and the Pensions Regulator might as well accept that in the sorry state that DB is now in, they’d be better off leaving the consultants to fight over the scraps like hungry hyenas.


The tough new regulatory environment  also requires trustees to work out what their long term strategic goals are.

If it hasn’t become apparent from the rest of this blog, I do not have much truck for this “toughness” word. “Tough” can properly be applied to the world that millions of Britains live in where pensions get paid from 66+ by the state alongside universal credit. Tough globally includes countries where living to 66 is an achievement in itself. Tough is seeing your house and land underwater through rising see levels or to live somewhere where it doesn’t rain any more.

Frankly, “tough” doesn’t really come into it.

Trustees are charged with paying the pensions promised to their members till the final day when they are due or to discharge their obligations by handing the scheme over to a third part – whoever that may be.

The long term strategic goals of a scheme may include reducing reliance on a sponsor and improving funding to a point where the scheme can be sufficient. Or it could include running the scheme as an entity intending to stay open indefinitely, as the local government pension schemes intend.

These aren’t really tough choices, they are just choices and frankly they are made for trustees by the circumstances in which trustees operate.If the sponsor of your scheme is no longer willing or able to meet the obligations you set it, then you really don’t have much choice about what happens next.


This tough new regulatory environment?

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I can think of no other area of commerce so cushioned from the tough realities of daily living than DB trusteeship. It exists in a pampered world in which the conference I’ll be attending will be a part.

The Pensions Regulator’s motto “clearer, quicker, tougher” is relative , not to the world in which we live, but previous regulatory regimes.

It is tougher for the Pensions Regulator, many regulators are being asked to take a 30 per cent pay cut – that is tough. It is a PPF style hair-cut which they must either accept or move on.

But for trustees, I don’t see this new world as tougher, nor even less comfortable.

The pain has yet to come and for most – is still some years away.

If you are a DB pension trustee and would like to go to the The DB Strategic Investment Forum – Wednesday 13th November 2019 – The Waldorf Hilton – London

Register here



Posted in de-risking, flood, Henry Tapper blog, pensions | Tagged , , , | Leave a comment

“Degree-educated” most at risk from pension scams….


Higher-educated savers are more at risk of losing their pension to fraudsters than those without the qualification.  That’s what a survey of nearly 2000 people told the FCA and TPR

10% of those without a degree said they would accept such an approach, a lower proportion than those with the qualification. Some 14% of people with a degree told regulators they would accept a review from a company they did not know.

Fraudsters often target those with larger pension pots, but also find a route to their victims by offering “free pension reviews“. It would seem that a higher education is no protection from the alacrity of scammers.

Targeting mass-affluent sophisticates

The new breed of scammers appeal to higher-educated middle class Britain because they are the ones with the biggest pension pots.

And because it’s people like me who appreciate the advantages of a technology-based service. it’s those who think themselves more sophisticated, who can be most vulnerable.

Writing on her blog, Romi Savova explains

Recent analysis from The Financial Conduct Authority and The Pensions Regulator found that over five million people across the UK (42%), could be at risk of getting scammed and the average loss is £82,000 per victim.

Most of these people are normal consumers, simply seeking to make the most of their money in a confusing pensions world. They are therefore susceptible to tactics that – to an industry insider – generally sound too good to be true. 

At the same time, most preventative action in the industry, while generally well-intentioned, has focused on extensive paper communications, images of desolate pensioners and generally the types of things that most consumers would discard in the category of “that doesn’t apply to me” and “it all seems confusing”.

Meanwhile, scammers are known to be helpful, accessible and relatable. It is no wonder that confirmation bias leads people to make financial decisions that can cost them dearly. Timing is also key.

Warning people about scams at the point of transfer is often too late. It is important to raise the level of awareness of pension scams before a consumer is even approached.

Pentechs get ready!

If you are interested in technology and work in retirement planning – you’re a pentech and you should be blocking out 29th November in your diary for the ….

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One way to raise awareness of pension scams is to devise a simple, interactive, shareable online game that can alert consumers to suspicious tactics before they are happening. If we can use technology to solve some of the biggest pension challenges we face as a society, we should also be able to come together as a sector to try and solve a problem that impacts us all: pension scams.

So it is with great hope and anticipation that we announce a Pension Scams Hackathon on 29 November 2019, where some of the most well-known companies in the PenTech space will team up to create the winning concept for a pension scams game, inspired by the “Scams and Ladders” board game.

Screenshot 2019-11-08 at 06.35.30.pngBarclays has kindly agreed to host us at Plexal, the innovation centre in the Olympic Park.  Pension Bee has invited a broad representation from the pensions industry to judge our efforts, including Michelle Cracknell CBE, Margaret Snowdon OBE (President of the Pensions Administration Standards Association), Dominic Lindley (Member of the Financial Services Consumer Panel and Member of the Pensions Dashboard Industry Delivery Group) and Stephanie Baxter (Deputy Personal Finance Editor at The Telegraph), each of whom brings a unique perspective to the challenge at hand.

Want to be involved?

While the concept for the game will be developed on the day, the technology powering it and its full user experience will be built by our friends at JMAN Group, to be launched to the public in early 2020. If you would like to participate in the hackathon or if you would simply like to support our initiative, please get in touch.

This event is all about uniting behind that which makes us strong: our focus on consumers, our belief in technology and our spirit for change.

We  look forward to seeing what we can achieve!

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Register on this link

Stop press*** Stop press***Stop press*** Stop Press

And while we’re on the subject of Romi Savova

Many congratulations to Romi on this, which places her not just as our leading Pentech , but as one of Britain’s leading young entrepreneurs. A working Mum with two young kids shows that there’s no ceiling to talent, application and a thirst to make positive social impact.


Posted in advice gap, age wage, pensions | Tagged , , , | Leave a comment

DWP – should the top topple when the spinning stops?

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I can’t remember another occasion when a Government department was stopped from lying to the people it serves by a Government agency. But that is what happened yesterday.

The fact is that the Advertising Standards Agency has banned four of the DWP’s six newspaper ads and the accompanying web page from appearing again in the form complained about.

Six ads for the Department for Work and Pensions (DWP) appeared in the Metro and on the Mail Online and Metro Online websites from May to “set the record straight” about the benefit.

The ASA said it had told the DWP to ensure it had “adequate evidence to substantiate the claims in its advertising” as well as presenting “significant conditions” to its claims clearly.

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Few of us would associate the happy smiling faces of the pair above as the beneficiaries of universal credit. It is not a bad thing that the Government presents the payment of benefits with  positive images, but when the substance of the advertisement turns out to be misleading, the images become those of actors and we begin to doubt the intentions of those who commissioned them.

What are the accusations upheld by the  ASA?

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The ASA said it considered that readers would interpret the wording “move into work faster” to refer to secure ongoing employment, but in fact the 2017 study the claim was based on had included “people who had worked for only a few hours on one occasion during the relevant period”.

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The ASA thought this misleading, saying it was not always made clear enough in the adverts the advance was a loan to be repaid within 12 months, or that the advance payments were not necessarily available immediately.

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The ASA said this was misleading as it omitted significant restrictions placed on the right to alternative payment arrangements, which are in fact available to about one in 10 claimants.

Why would a Government department lie like this?

Lying and spinning are the same thing, if the impact is to create a false impression. This advert lands on television viewers in three ways

  1. To recipients of Universal Credit, it is designed to quell discontent
  2. To voters at  forthcoming general elections, it’s designed to support the incumbent Government
  3. To tax-payers , it’s designed to show how UC is providing all of us with value for money.

Lying to society’s most vulnerable

The political point is time-bound but important, points (1) and (3) are more fundamental. Government has a responsibility to look after those who are jobless, homeless and penniless and that is what Universal Credit was set up to do. It is clearly unpopular because it restricts payments as part of the Government’s ongoing austerity program.

What the complainants against the adverts are saying is that the Government’s claims for UC are untrue and these complainants aren’t UC beneficiaries but their representatives.

The organisations that submitted complaints included the Disability Rights Consortium, the Motor Neurone Disease Association and the anti-poverty charity Zacchaeus 2000 Trust (Z2K).

In a properly functioning society , these organisations should be working with the DWP not seeking to stop it telling lies.

Lying to the tax-payer

I pay my taxes without demur because I know they put the homeless in homes, the jobless in jobs and the penniless in pennies

I do not expect to hear that a Government department charged with spending my money is lying to the people who are in such a predicament that they cannot be secure over a house, a job or the money to pay for life’s essentials.

That the DWP is also the department on which we depend for later life benefits like the state pension and the apparatus supporting workplace pensions makes it worse. It calls into question the probity of DPW quangos such as the Money and Pensions Service and Pensions Wise and it asks us to question why this department is being held responsible for delivering a pension dashboard.

It is a department with “form” for poor communication, but whatever the failings in communication over changes in state pension age, the DWP has never before been pulled up for deliberately misleading the people it is supposed to be helping.

When the top topples….

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Regular contributor to this blog – Gareth “the ferret” Morgan spends his life advising on benefits, he has called UC for presentational shortcomings on this blog before.

I expect he will comment on this ASA verdict. Gareth is one of the very few people in financial services who understands how UC works and calls Government when it doesn’t.

I am sure that he will be asking himself the question in the headline of this blog, just who is responsible for the shambles that has led to the DWP being found to be lying to its most vulnerable stakeholders?

My reading of the situation may be wrong and Gareth is better placed than I to comment. But I cannot help thinking that these adverts are the product of a department under pressure from within Government to make a better fist of promoting UC, under pressure from complainants to keep destitution from the door of the needy and under pressure from politicians to pretend that for the poor, austerity is over.

The DWP simply cannot do all these things without it seem – lying.

And here we come to leadership.


We have had a staggering 15 different people acting as Secretary of State at the DWP in the first 19 years of this millenium. They have been split between the two major parties and the revolving door suggests that no one wishes to take ownership of the DWP for any length of time.

The only minister with security of tenure was Ian Duncan Smith who was SOS for nearly a third of this period. He was of course the architect of UC and he is still in Government.

Is Therese Coffey going to be toppled now that the top has toppled? She is more interested in winning a general election and seeing through her vision of Brexit. She will not be held responsible for the ASA decision.

Infact nobody will. The decision will be swept under the carpet as a careless bit of Government – joining the omni-shambles that Universal Credit has become. Other departments will make “thick of it” comparisons and DWP civil servants will have internal inquests.

They will no doubt stick to the party line so far.

We are disappointed with this decision and have responded to the Advertising Standards Authority.

We consulted at length with the ASA as we created the adverts, which have explained to hundreds of thousands of people how universal credit is helping more than 2.5 million people across the country.”

Why should we believe them?


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Posted in advice gap, DWP, pensions | Tagged , , , , | 6 Comments

DC Governance turned upside down

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Everyone acknowledges that defined contribution pensions turns the risk register on its head. Instead of sponsors taking the risk of poor performance, poor information and poor governance, these risks are now taken by savers.

So why doesn’t scheme governance reflect this?

When I look at scheme reporting, whether for multiple employers of a a single sponsor, the format and intent of the reporting doesn’t differ much from the way we have traditionally reported on DB schemes.

In a very abstract sense, DC governance should bypass the sponsor altogether and be focussed entirely on helping savers manage their risks, understand the success or failure of the investment strategies employed and deliver individual metrics meaningful for each saver alone.

This is the reality of individual DC, whether it is delivered through a scheme or a group or personal pension plans, the “pot” is what the member relates to. It is the outcomes that members experience that matters.

A pragmatic approach includes employers

At an abstract level, we might want to do away with scheme of plan level reporting – we can’t. The sponsor – the employer still considers it owns responsibility for what happens within the plan, if only for old fashioned reasons. Employers have infact discharged their duty by choosing a qualifying workplace pensions and are not (in terms of regulatory compliance) on the hook if the chosen provider messes up.

However , in terms of reputation , a workplace pension can create havoc. NOW pensions – in their pre-Cardano days, caused acute embarrassment to employers through poor administration – compounded with a positioning in some league tables that exposed employers to criticism for choosing them. A failure by NOW pensions to address internal problems quickly enough and to come clean with employers lead to many employers moving qualifying schemes.

There are two key areas of risk for employers, performance and data quality. If providers cannot evidence that they are keeping member records properly or that individual pots are showing value for the money invested in them, then employers should consider the basis of their relationship of their supplier.

Providers have to be accountable both to savers and employers

I recently attended an event where the pension manager of a DC scheme with a large employer told a session that DC value for money assessments were an exercise to satisfy trustees and the employer and had no relevance to members. This brutally honest statement demonstrates the failings of current DC governance which simply replicates the DB pecking order.

It does not acknowledge that whatever happens at scheme level, is only an aggregation of what is happening at saver level and it is what the plan participants are getting that matters (not just to the savers but ultimately to the sponsor). If the plan participants are getting shoddy record keeping and poor returns on their money then the impact ultimately fall on the saver.

Employers only have skin in the game so much as poor outcomes can sour labour relations and make HR and Reward decisions on issues like early retirement, a lot harder.

DC Governance turned on its head

At first site , this row of metrics may look to be reinforcing the traditional model

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The pink box tells a trustee/IGC/employer that the average value for money score for the participants in the dataset was 52. That’s slightly better than average.

The average return savers got from the pots in the dataset was 7.66% and the average return from the benchmark, was slightly higher at 7.7%, as the benchmark contained no lag for charges , the dataset (net of charges) showed saver experience slightly better than average.

We are finding that these high level metrics encourage those with governance responsibilities to dig deeper and start filtering groups of savers to see who the winners are , who are not doing so well and what kind of things are influencing both value for money and absolute performance (the internal rate of return of the pot).

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We have analysed over 300,000 pots and new data sets are coming in every week, each pot is measured against a benchmark fund into which contributions are theoretically invested to discover the value for money AgeWage score.

The employer/IGC/trustee/provider is then able to generate reports that shows pot performance at any level of granularity he or she chooses (including individual pot analytics).

So, for the first time, fiduciaries will be able to look at things from the savers point of view.

This is what we mean by governance turned on its head.

Where is this going?

We hope , once people have got used to this new way of reporting, that we will be able to report to savers individually. We are still discussing with providers, fiduciaries and the regulators how this can be done in a way that doesn’t disturb people in the wrong way.

Engagement is one thing, but getting people all worked up about their pension could lead to them taking rash decisions with a lifetime of regret.

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All the same, wouldn’t you rather know what has happened to your pension pot than not? Is it really fair that you have to take all the risk and “they” get all the information?

Ultimately, we need balance. Most people are interested in their retirement money and our initial testing suggests that people get AgeWage scores and want to dig further to find out how they could improve them. Once people get into one pension pot, they want us to get scores for other pots and to see all the pots in one place (a dashboard).

This is taking governance into new areas, creating the opportunity for people to self-govern – using the super-governance of employers, providers and fiduciaries to open the door,

If you are interested in this form of governance and would like a demonstration, please contact me or call me on 07785 377768.


Posted in advice gap, age wage, cardano, corporate governance, dc pensions, FCA, Financial Conduct Authority, pensions | 1 Comment

Could workplace defaults give best value for money?


The results from our first 100 retirement savers are in and our test group averaged 54/100 on their outcomes.

Some of the people who did best are in workplace pensions , including a friend from Port Talbot who has got 78 VFM on his Tata Steel Aviva workplace pension. I managed 63 on my LGIM  fund and many of the other higher scores are from people who had the good fortune to be in a workplace pension default managed by a household name.

Results so far suggest that putting your money in cash has consistently delivered the worst value for your money while the more esoteric strategies we’ve discussed, have seldom scored above 50. The results are extremely predictable, well diversified , well executed low cost funds have consistently provided better outcomes for people than DIY alternatives.

my passive funds


Building governance from the bottom up.

Pension consultants like to measure governance at what they call “scheme” or “plan” level. That means measuring what is going on by aggregating all the little pots and treating people’s experience by looking at one big pot.

The problem with this is that it is not the scheme that is taking the risk, but the individuals within the scheme and telling people they are getting value for money at “scheme level”, isn’t helpful if their pot has underperformed.

This big data approach also misses the granularity you get by treating the scheme as a collection of small pots. By looking at a scheme from “pot up”, rather than “scheme down” you start putting members first.

For most people, the capacity to invest the amount they need to fund for their retirement in a risk free way, is simply not there. Cash is a terrible long-term bet, no matter how attractive it may be from day to day.

We need to take risk with our savings, if we are to meet our retirement goals, because we don’t have the money not to.

Trusting in defaults

For much of my career as a consultant I was distrustful of defaults. I had started selling pensions to people using what were then called managed funds, went on to become three-way managed then multi-asset and more recently diversified growth funds.

The main characteristics of the funds I sold in the 1980s were that they charged active fees to track the index, paid little attention to good execution (incurring horrible transaction costs) and were so big that they were never able to capture value in an agile way. These funds, especially the Allied Dunbar Managed Fund, lagged the market.

The Allied Dunbar Managed Fund made me distrustful of defaults.

Instead I was taught that in investment matters – small could be beautiful so I went through a phase of my career insisting that by using best buy funds, from lists created by fund- pickers, I could give my clients greater value for money. It turned out that I was simply following another herd and doing no more than I’d done earlier with managed funds.

So I decided at last, that picking funds was not something that I was any good at. I might as well leave the management of my own money to the people who I trust and I trust the asset managers who convince me that they are (to a certain extent) on my side.

What I look for in my default manager

Having worked in financial services all of my life, I’ve got to know some fund experts who really do know a lot about getting value for customer’s money. Men and women who are characterised by having high integrity, low egos and intelligence and experience that is both intuitive and learned.

When I meet one of these people, I listen.

One of the people who I listen to is John Roe, who runs the multi-asset funds of LGIM, he doesn’t run my fund but he used to and he manages a lot of money for friends of mine.

Over the weekend I will be thinking and writing about a presentation that John did at the PLSA conference a couple of weeks ago. He did it with Emma Douglas, who’s someone I have worked with – and who dominates the intuitive end of my spectrum of good. John is at the other end of that spectrum, he is a learned man who’s thinking I admire.

Both Emma and John work for one fund manager – it doesn’t matter that it happens to be LGIM, there are plenty of other good workplace pensions that benefit from great management (I mentioned Aviva at the top of this blog).

Where I find the very best thinking and the intuitive capacity to meet customer needs is currently in the management of workplace pensions. I would include the team Mark Fawcett has assembled at NEST in that category, I think the work that Nico Aspinall is doing at People’s Pension as another.

It is not for nothing that these people are working in workplace pensions, they choose to manage money for people like me that do not pretend to know better than they do, but they manage the money as if they were me, in other words they think about my value for money.

How the investment of money in a fund matters.

As I started out saying, most pension governance is at scheme level. The outcomes for individual members are of secondary importance and so long as those who do the governance satisfy their internal processes and can demonstrate they have exercised their duty – the job is done.

I asked a question at another session of the PLSA conference. The question was “what tips do the governance experts in this room have for explaining value for money to members”. I was surprised by the response from a senior governance expert who explained that her value for money work was not for her members but to satisfy herself and other fiduciaries that value had been achieved.

For the 100 or so people who have got AgeWage value for money reports on the pension pots they own, value for money is all about their experience, their investment, the costs and charges they are paying and what they can expect to see when they ask for their money back.

Of all the things that influence the value we get for our money, the return on the money invested is by far the  most important. The investment of our money matters hugely.

And it’s more than just return

When I talk with John Roe and others, I want to know from them what kind of investments my money is funding. Am I helping the world I live in become a better place or is my money adding to the problems?

The people who run our workplace pension funds are charged not just with delivering us a good retirement in financial terms, but to make the world we retire into – a decent place.

Which is why ESG is more than just a box to tick, it is the at the very heart of a fund manager’s job.

Could workplace pension defaults give best value for money?

We live – whether we like it or not – in a world where we must take on the risks of investing for our retirement. But we do not choose our workplace pension provider, or the fund or the fund manager – that is all done by others and we default into the choice that others make.

The fiduciary obligation on those who take those decisions for us is immense. It is relieved to a degree by good regulation – the construction of the master trust authorisation framework, the constraints that operate around contract based workplace pensions and the work of trustees and IGCs should mean that employers and members are protected from bad decision making.

Defaults are everything, over 99% of NEST’s 7.5 m pots are invested in defaults. The results from our initial work at AgeWage, suggests that using these defaults will deliver value for money but we have only just started.

One thing I am sure about, unless we start measuring the performance of the workplace pensions at the level of the individual saver, we will not really understand what ordinary people think of value for money. For ordinary people, the scheme or plan is a concept that means little to them and scheme or plan governance is achingly abstract.

People want to know what value they are getting for their money, AgeWage sets out to do that and the results so far are very encouraging, the people who are doing least are doing best and the people who are trying hardest to beat the market , seem to be coming off second best.





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SABS in the back – the minister’s last hurrah!

Screenshot 2019-11-01 at 10.11.55

The prototype statement – needs updating from 2018!

Screenshot 2019-11-01 at 10.17.42.png

Simpler annual pension statements (SABS) got a well-needed boost this morning when the DWP launched a consultation into their adoption.

This looks like being just about the latest Government consultation of this parliament and it could be the swan-song for our current pensions minister.

Then again, it could be the presage of his second term as minister – which would be no bad thing. Whether in a majority Government or as part of the coalition, Guy Opperman is the most obvious candidate to take this forward into a future pensions bill (cough cough).

First – commendations.

Well done Ruston Smith for making the statement happen – and for getting a set of standard assumptions into the market.

Well done Quietroom for keeping it simple. This statement could easily have gone the way of statements past but it’s still on two pages and still (mostly) the document we looked at in 2017.

Well done Eversheds Sutherlands for providing the supporting legals that kept the process honest.

Second – recommendations

The key recommendation of the consultation is that the distribution of SABS is through workplace pensions and specifically the workplace pensions used for auto-enrolment.

The Government are in a total pickle about definitions and the best they would best to simplify the scope of the statements to “DC workplace pensions used for auto-enrolment”. I think we all know that DB members don’t get DC statements and that people who have personal pensions (including SIPPs ) have complexity as part of the deal. If they want simple statements – they can consolidate to simplicity.

So I think that simple statements being trialled in workplace pensions is a good thing.

The second most important recommendation is that these SABS just use one basis for assumptions. This will cause all kinds of problems immediately as these assumptions may result in people’s projected pots and pensions going down.

Screenshot 2019-11-01 at 10.25.48.png

It will also annoy actuarial practices who have great fun (and make much money) justifying a range of assumptions. Simplification can’t come a moment too soon – chapeau to Ruston Smith.

The third most important recommendation is that (for now), these statements don’t tell people how much is coming out of their pensions. This I don’t support.

Here is the frankly feeble paragraph in the consultation which has probably taken a thousand hours of drafting and should take five seconds deleting.

Finally, we are seeking views on the benefits, risks, practicalities and timing of including approximate member-level charges and transaction costs on the annual benefit statement itself, to make it easier for members to identify what they’ve actually paid. Government supports the fundamental principle that as investors in variable return long-term savings products where the effect of costs and charges on members’ savings can be significant, members have a right to the information in a proportionate way. 

There is nothing – NOTHING – stopping the line that was in previous versions of the statement – telling us how much we paid for our pension – being put back in.

Screenshot 2019-11-01 at 11.33.07.png

spot the difference

All the user-testing told Government that this was absolutely what people wanted to see on their statement. The argument that people might take money away if they felt they didn’t get value from its management is bizarre. So what if they do? If people are so energised by seeing that a max of 0.75% of their fund is being spent on costs of running the money and charges from the pension provider, let people find a home for their savings they consider better value for money.

People who have taken the trouble to open the statement, read its contents and taken action about what they read are precisely the kind of people we want more of. To suggest that scammers will use the cost of workplace pensions to save them money with ludicrous alternatives is to underestimate the British public.

Third – expectations of adoption

What are we to make of the progress of this consultation into pensions BAU?

The DWP are not exactly forcing this down the pensions industry’s throat

Achieving change 13.

We would welcome your views on:

a. the advantages/disadvantages of reliance on the voluntary adoption of a simpler statement template; design principles; or descriptors

b. where responsibility for maintaining a template; design principles or descriptors for voluntary use should lie: with government or industry.

c. The advantages/disadvantages of mandating an approach through statutory guidance.


Unless this approach is mandated – we are no further forward. We can already adopt this approach voluntarily.

By stopping short of recommending the mandating of this approach through statutory guidance, the DWP has not moved the cheese.

The expectation , arising from this consultation , is that the DWP either mandate SABS or leaves it to the industry to adopt piecemeal. Having gone to the trouble of identifying the target market for SABS – DC workplace pensions – it seems absurd for us to go through this consultation without making compulsion the expected outcome.

The obvious conclusion to a consultation on simplification is that we will get universal adoption, if we don’t – we simply have what we have today, which is not why we have consultations on the future.

Let’s hope that the only statement in the consultation which talks of action, leads to a swift second round of consultation and early adoption.

Subject to responses, we will work closely with the FCA and others in developing regulation and statutory guidance for consultation. Where we have consulted on assumptions here, we do not propose to do so again as part of the next stage of the consultation

I will be responding with the intent that Government bring this on

I want simpler more engaging statements, have thought SABS the way forward for the past two and a half years and hope that this consultation will deliver conclusive support for mandatory use in the target market at the earliest possible opportunity.

opperman prospect

hello to the future or the last hurrah?




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Are IFAs missing the wood for the trees?

For those (like me) with weak eyesight, here’s that financial plan a bit bigger

Screenshot 2019-11-01 at 05.55.26.png

Dr Bannerjee’s financial priorities were not to maximise the fiscal gain over the taxman but to give him and his wife the financial security he wanted for the rest of his life.

He chose for his retirement plan started rather earlier than his scheme retirement age.

Dr Bannerjee was pressed by third party IFAs to explain what he meant by this criticism.

For Dr Bannerjee , his IFA was missing the wood for the trees. This is a criticism that could be laid at many professionals who are too close to their specialist subjects – tax and tax-law only  being cases in point.

A number of IFA’s press Dr Bannerjee for the planning he has done and he answers them all with considerable patience

As I have noted in some of the arguments that have raged over solutions to client case histories on this blog, objections from IFAs tend to focus on people like me lacking the professional qualifications to give guidance and Drs like Ben Bannerjee taking decisions for themselves.

Dr Bannerjee seems to have had the insight to spot his advisor’s fallibility, contextualise it and then build his plan on the platform of the advice he paid for, without taking that advice.

In my view, far from ignoring the advice, Dr Bannerjee has used the technical input he has got as a platform for the decisions that only he and his wife could take.

This is , incidentally, an example where fees can and should be charged unconditionally. The IFA has, as far as I can see, no role to play in the implementation of the post-retirement  strategy and there is therefore no risk of product bias creating a conflict.

The choices that comes from years of sensible decision making

Reading the part of the thread involving Dr Bannerjee, it became clear that he was in a position to take decisions in his mid fifties so that he could enjoy the lifestyle he wanted for his and his family. He was in this position mainly because he had worked hard and taken advantage of all the pension offers available to him. Not only had he been in the NHS Pension Scheme but he’d bought added years. He had been a model of prudence.

And being a part of a collective pension arrangement

Dr Bannerjee is not alone. We still have tens of millions of our population who have retirement choices open to them because they worked long periods in jobs where the pay was pensionable and the pension provides them with these kind of choices.

As with the state pension, the security that comes from simply participating in these great schemes (whether private or public) is a huge comfort to people of my generation.

It dwarfs the importance of private savings and the decisions we take on how we shape our retirement plans , still relegate our SIPPs , workplace pensions and ISA portfolios to the marginality of “additional voluntary contributions”.

While the immediate tax advice that pension professionals can bring is important, the primary considerations that drove Dr Banerjee ‘s thinking pertained to insurance, insuring that he and his wife were sufficient to the very end.

Security sits uneasily in financial models

I am uncomfortable about the way professional advisers have assumed that their expertise should be at the centre of retirement decision making. People’s retirements are their business and factors such as security are subjective and personal. This is particularly the cased for many women who , because of the pension gender gap, depend for their financial security on their partners.

Understanding the complicated nuances that the complex dependencies that people have both on their pensions and their families takes skills that go way beyond the technical and often they require a professional adviser to give clients space to take their own decisions. It also takes IFAs to accept that while those decisions may be sub-optimal in terms of tax or likely longevity or investment returns, those decisions are right for the client.

And very often, being part of a collective pension provides an emotional support – not least from fellow pensioners, that is lost to private markets. I enjoy being a Zurich pensioner for this reason.

Lessons for me (and perhaps for advisers).

Studying the amazing thread and all the commentary gives me an insight into the things that go on when we are thinking of winding down from work, or advising people of their options.

I am concluding that advice is a platform for people to construct retirement plans but that those plans have to come from the people making them, and not from financial mentors.

Most people end up – as Jo Cumbo feared she’d end up, with a pension pot but no retirement plan. Jo had the good sense to speak with an adviser early in her journey towards retirement and I’m sure she’s worked out what she wants and how she goes about things.

Most of us need guidance at the very least, Pensions Wise can kick that process off, signposts such as the PLSA’s Retirement Living Standards, can give direction, but ultimately what we do is very much our own business and as less and less people have the choices that Ben Bannerjee has today, more and more of us , are going to have to get through the woods ourselves.

Which is why I caution advisers from challenging people like Ben Bannerjee. These people, who can see the wood in their terms, should not be challenged for the plans they have adopted. Advisers should be learning how such people have created their retirement plan, not chopping down the trees.


For all that – most doctors take advice and rightly so


Posted in advice gap, NHS, Pension Freedoms, pensions | Tagged , , , , , , | 2 Comments

Halloween stuff – “Superstition ain’t the way”.

Sun Pension Pot

Six out of ten Americans hold “new age” beliefs and I doubt it’s much different in the UK. I have never- NEVER – heard a financial services firm openly prey on our superstition, but irrational behaviour underpins most of our decision making, my mates who structured CDOs – talked of their craft as  alchemy and – if our Prime Minister is to believe, he will reincarnate tonight from a ditch near Downing Street.

It being Halloween, it is a good time to celebrate the irrational and perhaps we can refer to my favourite image of a pension pot – supplied by the Sun – to remind my super-rational colleagues that most people regard their retirement savings as at best mysterious and at worst a witches brew.

Pension potty

So why are we so mystified. Read the head lines above and see what matters to the Sun.

  1. Avoiding high charges
  2. Avoiding being scammers
  3. Seeing all their money in one place

Mr Money and I did some work on this last year and yes it was around Halloween and yes it picked up on people’s fear of the irrational.

But – and this is what us rational masters of the pensions universe – fail to understand.,,, people see the pension experts as the vampires, and it’s their blood we’re sucking.

Superstitious -or suspicious?

People are in love with the supernatural, halloween is a bonanza for retailers and tonight I will be partying with the best of my colleagues at WeWorks with my wizard hat.

Tonight we celebrate the unknown forces of darkness, the other.

Today on the other hand I will be explaining to my friendly investors their AgeWage scores- which they got this week. Those who have scored well have been keen to publicise their investment genius.

While those who have found their pots have got less than 50/100 on the AgeWage scoring scale have been darkly muttering at me, like I was Gandolph.

AgeWage evolve 2

Actually – our scores are super-rational, they don’t pretend to predict the future, but they tell people about the past. They are the evidence of the costs and charges , the risk and reward and the skill or ineptitude of managers. They are the evidence of the impact of switching funds or sticking with the default. They are the evidence of decisions to use a workplace pension or switching to a SIPP.

In short, we empty the pot to show whether the witches brew is a retirement elixir or the contents of a fetid swamp.

For the superstitious, a pension can be entrusted to the alchemic powers of active management. For the suspicious, a pension must prove itself by its outcomes.

I’m on the side of suspicion and I’m for evidence- based investing, for accountability from those who manage and profit from my money. I am done with superstition and will promote transparency  going forward.

If you want me to test your pension pot and give it an AgeWage score – contact me at and we’ll tell you how you’re really doing.

When you believe in things – that you don’t understand

Then you suffer – superstition ain’t the way.

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Brexit? Time may be the healer yet.


A parliament united by what it doesn’t want

Boris Johnson has finally admitted he has abandoned his “do or die” on October 31st Brexit policy, after MPs voted for the Benn Act to secure an extension to the Article 50 process from the EU and avoid a disastrous No Deal.

The Lib Dems and SNP  have tried to pass a People’s Vote in this Parliament, even as recently as last week when Labour refused to support the Liberal amendment to the Queen’s Speech.

But with Parliament gridlocked, and with Conservative MPs, a substantial minority of Labour MPs, and a handful of independent Conservatives currently blocking a People’s Vote as a means of stopping Brexit in this parliament, a General Election seems  the only other alternative route.

The Lib Dems, Conservatives, and SNP only seem united in  waning to sort Brexit by electing a new parliament where  a majority  can emerge to revoke article 50 , hold a People’s Vote or finally leave.

So it looks likely that everyone will agree to hold an election, even Labour who have announced they’d agree to a 12th December date.

Politicians have found some unity in recognising that dysfunctionality cannot persist forever.

What Europe wants

To date , most of us have assumed that what Europe wants is bad for Britain. The idea that what Europe wants is what is best for Britain and Europe is considered naive. Consequently, negotiations with Europe have been confrontational.

Europe clearly doesn’t want Britain to leave, in fact it still clings to a hope that Britain might stay following either a referendum or shake up in Government.

The French prime minister is the only slight dissenting voice in the European consensus. He clearly wants to move on and has rather recklessly contemplated a “no deal” to that end.

The extension of the deadline has been modified to allow us to get out earlier than the end of January, but no one seems to think this likely.

I’m not hearing many British people saying this, but Europe’s united approach and consistent wish to engage in a negotiated solution is in sharp approach to disunited Britain.


Will people change their minds?

The hope is that by rolling the dice with a general election, the British people will create a decisive government where a majority view can be created.

But this is an extremely odd way of doing things. The British electoral system can create massive swings based on the votes of a few voters.

A second referendum would at least test the views of the people on the central matter in hand – the reason that people want a general election.

But there is no certainty that any Government would be able to find a consensus to implement leave if the second referendum confirmed the first. It would of course be easier to remain – which is what Europe wants us to do.

The risk of remaining is the alienation it would bring of large parts of the electorate that voted leave not on intellectual but on emotional grounds.

While I think it likely that you could change the minds of the small number of leave voters who saw it as good for Britain in a cerebral way, the vast majority of voters , take big decisions which they cannot get their heads round, on an emotional basis.

I don’t think that enough people will reason for remain to counter those people who believe in Brexit.

This cartoon from four years ago is horribly prescient.



We are stuck and that is bad

Where we are right now is “stuck”. We have just binned a hundred million campaign telling us to prepare for Thursday – 31st October. Those who did will now have to prepare for something else, though we don’t know what.

We are united in not wanting to be in this place, but we are in this place and the best we can do is to work our way out of the hole we have dug ourselves.

Conventional wisdom says that when you are in a hole, you should stop digging.

We are now so exhausted by all this  that we have lost all perspective on the matter in hand. I really think the best thing for our country would be to take a breather, a moratorium and ask for a further extension, perhaps for a year so that whatever we do, we do with a degree of national unity.

Because I sense that the decisions that will be taken in this current malignant atmosphere will be decisions that will not command any consensus. The purpose of the original referendum has been to clear things up, in fact it’s made things a lot worse. I can see no point in repeating the referendum, changing Government or crashing out of Europe in the current climate.


Time may be the healer yet

As we used to do at school, when there was a fight, we should all leave the playground, go back to class and sort this matter out when heads are cleared.

Perhaps the most difficult decision is the best decision . In this case, the most difficult decision is to put the decision off a year. That’s what I’d do if I had a way of doing it.


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How dashboardS manage “the invulnerable tide”.



I mentioned in yesterday’s blog that the Government can no more prevent the proliferation of dashboards as Canute could have controlled the waves of the sea.

A better analogy than Canute is Cuchulain, the mad Irish Warrior who died fighting the sea with his broadsword

Spake thus: ‘Cuchulain will dwell there and brood
For three days more in dreadful quietude,
And then arise, and raving slay us all.
Chaunt in his ear delusions magical,
That he may fight the horses of the sea.’
The Druids took them to their mystery,
And chaunted for three days.
Cuchulain stirred,
Stared on the horses of the sea, and heard
The cars of battle and his own name cried;
And fought with the invulnerable tide.

The invulnerable tide

And that “invulnerable tide” is with us today. It is driven by people who have money in pensions and want to find out where it is, how it’s done and how they can best spend it.

So far these people have had to go to financial advisers and pay them money to find them pensions. Many will already have paid other financial advisers to set the pensions up and most are fed up with the hassle they have to go to, simply to find out what they already own.

That tide is coming in and the longer we delay the establishment of a portal that gives them access to their information, the more likely we are to be flooded by this demand.

Uncontrolled, the demand for information will be satisfied not just by financial advisers but by those pseudo advisers offering people “free financial review” the people the Government warns us about.

The Government monopoly will not satisfy demand

If the Government builds a portal through which we can see all our pensions on a single dashboard, then people will find ways to capture that information by means of a process of data scraping , so that they can replicate that portal on a dashboard of their own.

This is how scammers will behave and it will lead to bad consequences, it will lead to money flowing to the wrong places, either through funds or directly to the scammers. It will lead to money flowing offshore into the kind of monstrous investments that get closed down every week only to reappear in yet more outlandish fashion offering us an  8 percent return on our money.

The reason that this will happen is that the Government dashboard will not be able to manage the secondary needs of people once they have found their pensions.Those need include working out what has happened to their money and taking decisions about the future.

The alternative to a single dashboard is multiple dashboards that get their information from the Government portal in a controlled and regulated fashion. And these regulated dashboards will help people answer the questions that cannot be answered by the Government because the Government neither wants to , nor is able to – advise people what to do next. This demand can no more be satisfied by the dashboard than it can by Pensions Wise.

Eliminating the grey zone

It wasn’t until reading a blog by Romi Savova that the penny on this dropped. Romi has recently joined the industry steering group and is  one of the people tasked with getting the dashboard in place.

In this blog, Romi talks of  a grey zone (the term was invented by Primo Levi for the blurring of victim and accomplice in Nazi death camps). The grey one Romi refers to is one where information is available but can be used to harm and self-harm – as we see in most poor financial decision making today. She concludes

The consumer owns their data and they will wish to share it. It is important that sharing is only permissible with trusted, authorised and regulated third parties. It is a myth that delaying so-called “commercial dashboards” will prevent the free flow of data. On the contrary, if we fail to consider, define and communicate data sharing protocols and expectations with consumers, any scammer will be legally allowed to scrape the data. Scammers thrive in the grey zone.

The view Romi has, and it’s one that I am beginning to better understand, is that a Government Dashboard has a role in finding pensions and that the Government has a role in defining how and to whom this data be shared.

Necessarily people will look to third parties to help them organise, analyse and understand their data and these third parties cannot be the Government – they must be commercial for there is no appetite within or without Government for a state controlled financial advisory service.

What will be delivered when.

In terms of tech delivery , there is always a minimum viable product and I see the Government’s dashboard as just that. It should be delivered by the end of 2020 and Chris Curry and his team should set a hard deadline for that – otherwise we will not get this thing over the line by 2024.

I think the minimum viable product is a pension finding service which is what the Government portal could and should do and I think that the protocols for finding pensions should be in place by the end of 2020. If your database is not capable of identifying who you hold data on and if you cannot link this to another database via an API, then there is something wrong.

I think that concurrently to the creation of the data finding service will be an authorisation process so that in the course of 2020, FCA authorised firms can apply to act as agents for customers who want to access data from the Government dashboard with the help of that authorised firm.

That firm need not access data by scraping, but by direct access to the data that is already available to the Government dashboard. In short , commercial organisations – authorised by the FCA, should be allowed to find people’s pensions to and through the Government portal, which acts as an authoriser – rather than a regulator.

What happens on the commercial dashboards?

There is a separate discussion to be had as to how information that appears on these commercial dashboards is presented. Romi’s view is that we should use the simplified pension statements pioneered by Ruston Smith with the help of Quietroom. I’m pleased to see she is fighting for this information to include the amount we are paying for our money to be managed as part of this simple statement.

There may be other things that might appear. I would like to see the AgeWage score we are pioneering appear as a matter of course. If AgeWage gets authorised, we may well ask to be authorised to run a dashboard, find pensions , help people with how their pensions are done and help people aggregate to the best pension for them.

But that is for the future.

The Bill is passed, let planning now begin.

What has blighted progress in innovating pensions has been uncertainty. We are familiar with the uncertainty of an unfulfilled plan in politics, and Brexit has undoubtedly impeded the progress of pension innovation – not least through the absence of legislation

I am pleased that I am writing on the right side of the reading of the Pension Bill and have this good news to communicate this morning. With so much going on – we should at least be thankful for this.


If you’ve enjoyed the references to Cuchulain, you can hear the poem’s author, WB Yeats – read these lines and more.

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A genuine parliamentary “pensions debate” – something to be welcomed.


I have not had time to follow the parliamentary debate on the Pensions Bill but I’m grateful for Jo Cumbo’s tweets and will pick up on them. Firstly, it is good that we have a House of Lords with people in it – Ros Altmann, David Willetts, Jeannie Drake and Brian McKenzie who care enough about complex issues like CDC and the Pension Dashboard to debate them.

The Pensions Dashboard

I am on the opposite side of the debate from Jennie here but understand where she – and friends of mine like Gregg McClymont – are coming from. Nationalising the pension dashboard as part of the Money and Pensions Service will be a noble public venture and like MAPS and the combined pension forecast, it will render the pensions dashboard a part of the pensions infrastructure. The Combined Pension Forecast was five years in the failing, MAPS looks like it could out-sprint the CPF , becoming obsolete before it has even published its strategy.

That Said both Jeannie and Brian Mckenzie recognise that there is little trust in the pensions industry not to screw up dashboards.

We have a thriving tech sector in this country. We are world leaders at Fintech and we could be a world leader at Pentech if Government would give the likes of Will Lovegrove, Romi Savova and Sam Seaton the chance. Guy Opperman has given Chris Curry every opportunity to deliver a Pentech dashboard and after four years of miserable failure in the hands of the DWP, it is time they were allowed to get on with it. Which is why I say to Jeannie – and Gregg –

“you’ve had your chance to deliver a dashboard and failed- move on.

That said, Jeannie’s challenge is the right challenge, we need the kind of independent oversite of the dashboard, we had for open pensions. That oversite should not come from a Governance committee packed with the pensions “home guard” but from outside. “Home guard” sounds harsh but the  PLSA conference showed me, there is little understanding of the big dashboard risks within the pension community. Those risks are to do with meeting customer expectations on the big things like finding pensions, not worrying about the minutiae like actuarial assumptions within projections. The rules for Open Banking were created by the CMA, the rules for the standards governing data transfer in the dashboard should equally come from an expert and independent source.


CDC and intergenerational fairness

David Willetts – like Jeannie Drake – hit on the key issue with the Royal Mail’s version of CDC.

Again we have a senior politician getting to the nub of the matter and again the answer to the question he is raising lies in the rules – governance – of the road.

You cannot legislate fairness, fair treatment of the various groups of people passing through CDC is a matter for trustees to devise and implement and I am quite sure that there will be groups of CDC pensioners and savers who will argue that they are losers.

The Royal Mail scheme is as ambitious as CDC will get. It aims to create a single scheme that allows postmen to build up a target level of pension and for that pension to be paid to them and their families for so long as they are on the planet to receive it.

If Royal Mail can get it right, other schemes may find it easier, especially if they restrict the scope of the scheme to the provision of scheme pensions from the purchase of a DC pot or pots at retirement.

As with the Pensions Dashboard, the pensions industry has jumped ahead of itself, worrying about this implication or that, when what is needed right now is a private sector initiative to get off the ground so that others can innovate around it. As with the dashboard, the amount spent on the initial project will be recovered later from adoption by commercial entities – I have no doubt that the multi-employer DC master trusts are already licking their lips.

We should not be worried that CDC falls into the wrong hands, any more than we are worried that the dashboard falls into the wrong hands. The progress of internet banking – the precursor to open-banking, suggests that what is needed for both the dashboard and CDC to work, is for us all to feel more comfortable about our pensions being fungible – interchangeable.

The idea of fungibility

What the dashboard should do for people is to allow them to interchange their pension pots for a wage in later life that suits them. So rather than them feeling they have money with various people, they feel they have control of their money and how it is spent. The pensions dashboard should put people back in control of their later life financial affairs allowing them to create a financial plan with full information on choices.

While the Pensions Dashboard organises our later life financial resources, CDC should become a way of interchanging investment pots into a wage for life.

Both the pensions dashboard and CDC share this transformative capacity, they change what was hard into what could be easy. This is the idea of financial fungibility. The idea is the interchange of a single resource – money – from one state to another – can be beneficial to  its owner without detriment to society.

Welcoming the dashboard, CDC and this debate.

In something so transformative as the dashboard and CDC, there are bound to be fears, fears of detriment to savers and detriment to one generation caused by over-payments to another.

The rules governing the dashboard and CDC need to be put in place by parliament and that is what is happening in the Pensions Bill.

Debate on that bill needs to be had , not just in the House of Commons and the House of Lords, but wherever there is interest.

Sadly there is too little real debate going on, which is why I am writing this blog. I have my position, I am pro the private sector being involved in dashboards and pro the commercialisation of CDC. But in both cases, I want this to happen in a controlled way and not in the way we have seen the pension freedoms implemented.

It is frustrating that it is taking so long to get legislation in place but we have to respect there are other priorities in Government and stand in the queue. However pensions are now at the front of that queue and we are ready to see buttons pushed so that we have a pensions act in 2020 with CDC and a pensions dashboard in it.

target pensions

On target for CDC and a pensions dashboard



Posted in pensions | Tagged , , , , | 3 Comments

Learning how to buy pensions.

Screenshot 2019-10-20 at 08.32.01

Mark Ormston who works for Retirement Line has written an excellent blog on linkedin. This is my version of his blog.

Are people taking sub-optimal annuity decisions?

The figures in the circles are  taken from the FCA Retirement income data report for the period April 2018 to March 2019 –  and come as no surprise to Mark and his team.

Mark asks

“Why is the take up of these valuable annuity options so poor?”

His conclusion is

“Simple – Cost”.

Screenshot 2019-10-20 at 08.32.38

Is this mis-buying or could we be “selling” better?

Financial Advisers – who are little involved in annuities – will point out that many people buy inadvisedly and that they’d be better off buying through them. Most annuities are actually bought off the page – or at least via Google and that may be because of product bias amongst IFAs or it may be because people who buy annuities are the kind of people who try to disinter-mediate.

These are typically independently minded people with a decent level of “financial capability”.

I don’t think that anyone is setting out to misinform the public, but after thinking about Mark’s blog, I think there are aspects of retirement decision-making which could and should be revisited. That’s what this blog attempts to do.


Solving the “what if I die too soon” problem

Many people who investigate annuities are put off by the thought that they are disinheriting their family with the annuity purchase. This is a particular worry for people who worry about dying soon after buying the annuity. It is possible to insure against losing the purchase price of the annuity by buying “value protection”.

Mark has done some sums.  His numbers are based on a healthy 65-year-old male with a £100,000 pot.  Here’s his conclusion

Screenshot 2019-10-20 at 09.41.18.png

Remember, this person has an entitlement to 25% of that £100,000 can be taken as tax free cash so what Mark is suggesting is that by buying value protection , the consumer is insuring that the full value of the annuity is paid out if the annuitant lives and the balance between what has been paid so far and the annuity is returned to the family as an inheritable lump sum.

This is an entirely new way (to me) of thinking about the annuity as both a protection against living too long and an insurance against dying too soon.

Solving the escalation problem

Mark tells us  there ‘s plenty of consumer interest in the more expensive annuity options, especially in escalating payments, an option that’s  frequently quoted and usually dismissed when its impact is understood. Anyone who’s been involved in programmes offering pension increase exchange (PIE) will know how ready people are to swap indexation for jam today.

Can we afford not to escalate?

I speak as someone who did not take the tax-free cash on offer when I drew my pension. The main reason I didn’t was that I was being asked to swap 3% escalating income for cash at an extortionate exchange rate.

Mark points out that the typical conversation he has with people assumes that tax-free cash is sacred

Q.    ‘Would you like to take out 25% of your pension savings free?’

A.      ‘Oh – Yes please’

As a result, the tax-free cash is taken out of the equation and we all buy  level annuities.

But reinvesting tax-free cash in the annuity purchase could have partially restored the escalation to the annuity  and Mark’s point is that this conversation is not being had. For many people who are looking for a real wage in retirement, tax-free cash is simply not what is needed.

I know that advisers will pick up on the fact that pensions annuities are taxed and that there are ways of getting the tax-free element of the pot paid out through drawdown.  I know  that there are plenty of ways to generate tax-free income from ISAs , but the point Mark is making is that if a client is coming to him for income, he may not need a cash lump sum at all.

Many people are being talked into a course of action that is just not what the customer ordered. Customers who live long , may well regret their escalation, when the cash is gone.

Protecting your partner

The third of the three issues the FCA have highlighted is that most annuities are purchased on a single life basis. The numbers of married couples in retirement suggests that many spouses are not protected from living longer than the person buying the annuity.

In almost every case there is likely to be enough money in the tax-free cash to make sure that the annuity is paid out for as long as is needed by the surviving spouse (eg till the second death.

In all three cases, tax-free cash can be used to overcome the problems normally associated with annuities.

Let’s learn how to buy pensions!

I’m grateful to Retirement Line and particularly Mark Ormston. Every time I speak with Mark I get a fresh insight into the retirement decisions he sees people taking and he teaches me new ways at looking at old problems.

Of course there are some fundamental issues with annuities which will put many people off them, chiefly their cost at a time of depressed interest and gilt rates. While this can be partially mitigated through the purchase of fixed-term annuities, an annuity is not right for people comfortable with market risk. But there are many people who want the certainty that annuities bring and I don’t think the simple messages in Mark’s blog are being properly disseminated.

Retirement Line aren’t financial advisers (though the firm is authorised by the FCA). They offer complimentary conversations to those people have with financial advisers. Many people who speak to financial advisers go on to speak with Retirement Line and get both perspectives.

I am learning and I think many advisers could learn a lot from Mark and his team. I think that many occupational pension scheme trustees should be speaking with them too!

Retirement Line.jpg







Posted in advice gap, age wage, annuity, pensions | Tagged , , , , | 2 Comments

Those chants don’t seem so funny now – a depressing day for Yeovil fans.

Yesterday’s was the first Saturday afternoon I’ve spent at home since March. I had thought to go to Haringey to watch Yeovil against Haringey in the preliminary round of the FA Cup but thought against it as my son is away at College and my partner has toothache and could do with my company.

We are an apolitical household, my partner and I have radically different views on Brexit and so while we were aware of developments, I did not go marching.

Instead, we watched the racing and I watched the twitter feed. After a poor first half we got a penalty and I awaited with impatience the result. After a lengthy delay, we scored. It was to be the last good news I was to hear about that game.

Shortly afterwards, the club feed gave the first bad news

The detail came from following the #YTFC. Two bottles had been thrown onto the pitch, the goal keeper had been spat at, obscenities had been thrown and there was talk of rascist chants directed at the Borough goalkeeper.

After a delay, the match was announced to be abandoned and the players came back on the pitch

Later that evening the Borough manager made a statement explaining why he took his players off the pitch.

Talking to Radio 5 he said not just the goalkeeper but his number 6 were subject to racial abuse and that the team were in no state to play the rest of the game.

Yeovil Town issued a club statement.  The Avon and Somerset police have called for video evidence.

The impact on Yeovil supporters has been shock and deep shame that the traditions of a family club with fans who pride themselves on their behaviour will be tarnished by this.

Last week, immediately after a home match, we’d had another horrible shock when we learned that one of our great fans, Martin Baker, had been found dead in his flat, we now know he died of a massive heart attack. Martin had run the unofficial club news site “Ciderspace”.  Martin grew up in Shaftesbury and knew my family well, but he knew everyone well – this match had been dedicated to him and the non league football paper had written this tribute to Martin. 

Like all Yeovil fans I am upset for the club , players and true fans – of whom Martin was as true as any. Yeovil is a small community. It is not a greatly loved place, it has many problems – high teenage pregnancies , low levels of ethnic diversity and average incomes well below the national average. The football club had been a great source of pride for generations. In 2013 it had been promoted to the Championship and the following season Leicester, Burnley and other top flight clubs visited Huish Park to play league fixtures.

Yeovil have since fallen into National League Division one. Yeovil Fans have stuck by the club and this season have seen an upturn in fortunes under a new manager and with new owners. We have a brilliant woman’s team and a growing youth set-up.

Recent problems

Despite this resurgence, Yeovil has been in the news for the wrong reasons lately. A few weeks ago in what was jokingly called “Ball-boy gate”, one of the ball-boys got sent off by the ref in a home game for wasting time. The club marched all the ball boys off in solidarity and the ref was left to get the ball out of the stands himself – later in the game.

This seemed like innocent fun at the time but there were already more sinister tones. Though I didn’t hear it – being on the other side of the ground, Bromley fans suggested that some of our fans were less than sympathetic when the Bromley goalkeeper got injured. There were further rumours of bad behaviour at an away game at Hartlepool and now this.

I feel responsible for our club , though I don’t go to many matches. I suspect that all the more loyal fans feel responsible for the behaviour of their fellow fans. We all feel guilty that this bad thing has been visited on Haringey Borough by us. Indeed our most famous fan, Pat Custard, singled out Haringey Borough for its hospitality, this was their day – more than ours, they are in a lower league and this was their big game.

I was pleased to see our manager’s arms around Borough’s goalkeeper and the two teams mixing without rancour after the incidents.

Screenshot 2019-10-20 at 18.49.01.png

Yeovil Town apologises and I put my apology to what has happened. And of course what has been alleged to have happened has national resonance as it occurred in the same week as our national team got abuse in Bulgaria.

Our fans will now be put in special measures. When we go to any game, we will  be barracked by opposition fans for what happened yesterday. We will not be able to wear our scarves and shirts with the pride we once did. Obviously we all want the hooligans to be banged to rights but we shouldn’t isolate them as the sole problem. In as much as we  let this happen  no-one can claim to be blameless.

And our own fans have made it very clear they have every sympathy for the Haringey players

But we need to see balance in reporting and await the results of the various inquiries, before judgement on the club is delivered. I found this article provided that balance at this early stage.

I understand that several of our fans met with their Borough counterparts after the game and that all was well between them


Our team itself is very diverse, and players want to come to Yeovil because we have a reputation for treating people as people. Here’s the forward line of our squad.

Screenshot 2019-10-20 at 08.15.59.png

The behaviour of the few has dishonoured  the memory of Martin and the heritage of the club which will now be remembered for the wrong things. Many will argue that this is a massive over-reaction resulting from social media, whatever the findings of the police inquiry the damage has been done.

Just like pension scamming, a few rotten apples pollute  the whole barrel. There is no way that Yeovil can undo what is done – if found guilty of hate crimes and of bottle throwing, the  culprits  must be banned and we all must bear their shame.

If we are found complicit in racism , Yeovil should voluntarily resign from the FA Cup  and we should adopt Haringey Borough as our team for the rest of their time in the tournament. But I say “if” as it’s still far from clear what actually did occur.

We can’t keep hate-chanting; even calling the keeper a fat bastard (which it seems we were doing) isn’t funny – it’s rubbish behaviour.  Any kind of bottle throwing and spitting is football violence. Things will not get better until we stop thinking this stuff – even done by others – is funny.

I have stood in Thatchers when  gypsy chants have been sung, I’ve hear the Adams Family song, the abuse of northern fans, even the chants against Weymouth. I’ve heard homophobia on our terraces in Brighton away matches . All this seemed innocent fun at the time – it doesn’t now.

Appendix; post of Dave Coates on the @RedmenTV twitter feed

Excuse the long post, but did anyone see the tweet from TheRedMenTV about our current situation? If not, take a look at my retweet from tonight (Tuesday).

Basically, the snippet of a wider debate they posted calls for us to be chucked out of the FA Cup.

Below a message I sent them in response….

Good evening,

I just viewed your recent @TheRedmenTV Twitter post where your host calls for Yeovil Town to be kicked out of the FA Cup following the allegations of racism made against a supporter at Saturday’s FA Cup tie at Haringey Borough.

I will begin by saying I recognise these snippets posted on social media are there to get a reaction from people and make people watching the full video; I did and I recognise there was a bit of debate about the rights and wrongs of this what was being proposed.

However, as a Yeovil Town supporter who attended the match on Saturday I want to tell you about my experience before, during and after the incident and what comments like your ‘snippet’ have contributed to.

Having left my home in Lancashire at 7.15am on Saturday to get to Haringey, I was one of the first to arrive at the ground and visited the club bar where I was actually greeted by the Haringey chairman.

He expressed his hope that Yeovil would bring more supporters to give his club a well-deserved pay day, we spoke, wished each other well and my conversations and those of other Yeovil fans with staff and supporters of Haringey was nothing but friendly and good spirited.

The match itself was fairly uneventful until the 63rd minute when a penalty was awarded in Yeovil Town’s favour and there was, what appeared from where I was standing, to be an exchange of words with Haringey keeper, Valery Douglas Pajetat.

The keeper squirted water towards fans behind the goal and the situation quickly got out of hand, a plastic bottle was thrown on to the pitch and it quickly became apparent things had escalated.

At this point, both myself and more than 20 Yeovil fans around me immediately confronted our own ‘fans’ calling for whoever had thrown the bottle (this was as much as we knew at this point) to be ejected from the ground and urging stewards to act to do this.

The situation appeared to settle and the keeper faced the penalty which was scored, at which point another bottle was thrown on the pitch, and further words were exchanged which led to the Haringey team walking off, followed soon after by the players of Yeovil Town.

By the time the penalty was scored, there were stewards wearing body cameras dealing with the perpetrators involved in the verbal exchanges, and would have picked up anything said at this time – useful evidence in an investigation, I would imagine.

You have obviously read the headlines since then, the vast majority of which has acted as judge, jury and executioner before either a police or FA investigation had begun (let alone been concluded) and judged Yeovil Town supporters as ‘racist’.

My evidence of this? Supporters being abused as they left the ground, including insults being hurled at buses filled with people who applauded the announcement that the game would not continue, and subsequently hearing from countless fellow supporters that they have received messages and had comments about their club’s ‘racist supporters’ over the weekend and during the week that followed.

I experienced this myself from people and it all came before any type of investigation had been completed.

I now know people who have supported Yeovil Town for generations who are afraid to attend future matches for fear of being the subject of further abuse for being ‘racist fans’ and this has been driven by a rush to judgement of so many parts of the media which led to commentary like that you chose to post.

I now have genuine concerns my friends could be targeted for retribution when attending the re-arranged fixture next Tuesday night. How can it be right that people are made to feel like that? If Yeovil supporters are abused, what role will posts like yours have played in this?

You will have read that two people have been arrested on the allegations of racially aggravated common assault and (as I send this message) no charges have been made public against them; and yet you published a statement which has reached a judgement already.

If these people are found guilty of the allegations against them on the basis of evidence, you will not find a single Yeovil Town supporter who will disagree that they should receive bans and criminal charges brought against them.

But what about the stain on the name of thousands of other innocent people who did nothing more than support the same team as them? What about the reputation of a club with no history of any type of crowd trouble, least of all racist behaviour? I am afraid that statements like that you have made have left both of these things tarnished beyond repair.

If ever there was a supporter of a football club who understood the concept of trial by media and the need to look beyond the headlines, I would have thought it would be Liverpool.

Because one idiot threw someone in a fountain in Barcelona, are all Liverpool fans in agreement this type of behaviour is acceptable? Of course not, it is one idiot. The response of Yeovil supporters at the game and subsequently makes me quite sure there are none amongst us who believe racism has any place in our society, let alone football.

If there was a supporter of a football club who understood the idea of legal process and the concept of innocent until proven guilty, I would have thought it would have been Liverpool.

For this reason, I felt compelled to contact you to convey my deep disappointment at how you, like so many other parts of the media, have tarnished the good name of a club with no history of this type of behaviour, contributed to a situation where people feel afraid to attend a football match, and all before an investigation has run its course.

I hope you take this message in the spirit it is intended, from one football lover to another.


Posted in pensions | 1 Comment

That was the week (that was)


This week has seen a Pensions Bill make it into the Queen’s Speech, the Pensions Regulator’s Stakeholder Conference (Monday) , the Owen James Meeting of Minds (Tuesday) and the PLSA conference (Wednesday to Friday).

And then there’s the minor political and sporting events rolling out this weekend.

It was an enervating week for me that included a trip to Media City in Salford to talk on radio 4’s you and yours program (you can listen here). It was a real privildge to see the PLSA event with a press pass and I had insights into the worlds of TPR and of senior IFAs which I have hardly earned.

But being close to the action is not the same as being part of the action I realised when talking with Chris Curry just what being part of the action means. Look at this picture and you get an idea of the part Chris has had to play this week.


Chris is the bloke with blond mop next to Pensions Minister Guy Opperman, Terry Pullinger sits on the other side (a key player in  CDC’s inclusion in the Bill).

Neither Terry or Guy made it to Manchester but Chris did and he carried the torch for the Pensions Dashboard. To me – he was the star of the PLSA, not just carrying the Pension Minister’s message but acting a stabilising influence in a number of sessions where frustrations with the (lack of) progress made on the dashboard so far, could have made news for the wrong reasons.

It wasn’t just Guy Opperman who had to miss the PLSA, so did Laura Kuenssberg (replaced by Nick Robinson) and we saw nothing of the main CDC protagonists – including Shadow Minister Jack Dromey. The reason for absentees was of course Brexit, though the impending industrial action at Royal Mail may have made it and CWU’s absence equally political.

So what were the key debates?

The PLSA were never going to cover all aspects of what’s going on in pensions today. The Conference pretty well ignored CDC and its implications for both DB and DC pensions – maybe that is a debate for next year but I felt it was an opportunity lost.

The FCA’s key pension issues surrounding the provision of advice and guidance, how we measure and communicate value for money and the implementation of investment pathways never got into a session. There was an informal discussion of VFM with PLSA luminaries which included a statement from a senior pensions director that the Trustee Chair’s VFM statement was an exercise in Governance and of no importance to members.

As regards pension taxation, I heard a lot of whingeing about rich people’s problems (AA, MPAA and LTA limits) but the issue of 1.7m savers paying 25% too much in pension contributions barely got a look-in. I found myself violently agreeing with Australian Martin Farhy who described the sidecar as a distraction. If we really care about the cost of pension savings for the low-paid, we need to get them the incentives they’ve been promised. The lack of interest in this topic at this conference was shameful.

Similarly, the issues of cost- transparency was given little prominence. The one session on the PLSA’s CTI initiative competed with three others. The handing over of the baton to the PLSA’s CTI team seems to be yesterday’s news. The concept of transparency was  much lower down the debating priorities than I would have expected. There was nothing in this conference from the CMA and it was as if the asset management market study had never happened.

Relative to a decade ago, when I last attended , the number of debates on the funding, governance and investment of DB plans , was well down. They were replaced by an exploration of the social purpose of pensions. For me – the key speech of the week was from Nigel Wilson on the Power of Pensions to fulfil social purpose.  The debates on engagement tended to focus on responsible investment and this is where views were most polarised. An early trustee event on “the parameter of trustee investment duties” saw trustees refusing to co-operate with the ESG agenda, one pension manager in a debate on DC default design told the audience that young people were only interested in financial advantage and had no truck for ESG.  This debate continued throughout the conference and climaxed in a head on twitter feud between Iona Bain and Rebecca Jones on precisely the same point.

Paul Lewis joined in

Clearly the issues of individuals choosing to engage with pensions were of interest but there was little consensus as to how we were to achieve it.


What solutions were on offer?

If the key debates were around engagement, so were the proposed solutions.

PLSA is at its best when conducting research and delivering standards, the standards aren’t always worthwhile (see the degeneration of PQM) but many have stood the test of time and become embedded into pensions culture. I hope that the CTI standards will be part of the way we do things.

So the New Retirement Living Standards that I reported on yesterday should be this conference’s lasting legacy.

The standards should succeed but they will need delivery. Over the three days of the conference, I attended a number of sessions on technology. They were all pretty ropey. With the exception of Smart’s Martin Freeman, I did not hear anyone talk of Fintech in a meaningful way. Frankly the PLSA and the occupational world lag – and this is a big worry for the pensions dashboard. The Exhibition was – in terms of technology on show – a big disappointment.

Ideas using the new technologies brought to us by the distributive ledger were thin on the ground and data was consistently referred to as a threat to progress not part of it. Margaret Snowden claimed it would take £25m to clean data ready for the dashboard, I suspect that this is a spectacular low-ball.

Until pension schemes can be proud of their data and its management, the fully inclusive dashboard looks a long way away.

In Summary

The PLSA conference showed me an occupational industry divided as I have not seen it before. I saw little common purpose and a lot of self-examination. The PLSA has woken up to the change in its role but it has yet to find its new identity.

It is groping its way towards its new purpose and that is surely as the standard setter for issues such as target incomes, cost measurement and the governance of ESG. The PLSA should be where we go to understand value for money and the FCA and other Government agencies such as MAPS and GAD should be part of next year’s program.

The PLSA are not going to drive forward Fintech as Pentech.  That is for entrepreneurs, some of whom are happily on the pensions dashboard. But Sam Seaton, Will Lovegrove and Romi Savova were not at this Conference. They should have been.

This has been a week when I have seen pensions through many people’s eyes and I hope that as time goes by, the two major initiatives that took a step forward this week – CDC and the Pensions Dashboard, will help bring those worlds together.

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Thumbs up for PLSA’s Retirement Living Standards

Screenshot 2019-10-18 at 07.33.07

It’s a shame that the timing of the PLSA’s big reveal coincided with the announcement of the  Brexit agreement. It hasn’t got much airplay and frankly- even the PLSA annual conference seemed a little underwhelmed.

The PLSA have launched a lot of initiatives over the years, few have worked.

I’m going to stick my neck out and say that the retirement living wages produced by the PLSA research team in conjunction with Loughborough University are useful and should be adopted by everyone in pensions.

This one works for me – but see for yourself.

So what’s it all about?

The PLSA has identified a problem, the average person has nothing to target as a retirement income ( Agewage).

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Plucking numbers out of thin air, which is what has happened up to now, is no way to get consensus on what is needed. What’s needed is a solid -evidenced based – set of numbers that we can all get behind.

What the PLSA have done is solve this problem by teaming up with the people who set the National Living Wage and repeat the research that got us where we are with that. The numbers are based on research on what ordinary people think they need as a minimum to get by, to be moderately well off and to be comfortable – in later life.

You can see the gentlemen behind this if you click on the picture above ,  he’s lurking below the screen.  He and his colleagues did a good job explaining to us how the detail worked. I probed about why the shopping basket for basic and moderate lifestyles came from Tesco and why – for the comfortable, the cost of goods was measured by a shop at Sainsburys.

The research shows that the super discounters – Aldi and Lidl – are not suffeciently available to form part of our national shopping cost benchmark. Similar questions solicited similar answers when assessing the types of booze and food we bought.

The thinking behind these three categories of lifestyle is carefully articulated using words that occurred in conversations with the ordinary people who participated in the research.

I was very taken with the kinds of leisure activities people said they wanted to engage in , in later life

You can read for yourselves the detailed analysis by going to the website created for geeks like me , for whom this research matters, it’s a surprisingly interesting place to nose about in! Here’s the link.

And it wasn’t just me who was impressed by this concrete research

Immediately the simplicity of the approach sparked questions..

One of my (ha ha) fellow journalists, Rebecca Jones, asked sensible questions about the exclusion of housing costs from the retirement living standards. The assumption that these would be reduced by the end of mortgage or the availability of housing benefits , doesn’t quite work for me. Most elderly people I know complain about the cost of maintenance of the properties they own or the need to meet the rent because they don’t want to or can’t claim benefits.

So I can see the numbers sparking debate and engagement just as any simplified and universal benchmarks will do. These living standards need to be personalised but they act as a starting point and we heard later in the day that Aviva and others are already integrating these numbers into their planning.

I will certainly be looking to do the same for customers interested in creating a retirement plan , trying to work out what they want as a wage in later age.

You can judge for yourself whether the marketing collateral created to get the message out works. I hate it and am absolutely sick of these animations, but judge for yourselves! You might want to feedback on this blog as the comments box is turned off on YouTube

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Democratising pensions in Manchester

Diverse accross the ages

The pictures above are from the library supplied journalists by the PLSA, they are what the PLSA would like you to think they are about, and yesterday’s sessions really were about youth.

But young is as young did and as we drifted away from the hall I noted that the numbers of young people heading for the PLSA’s CEO dinner or the various watering holes in MI , I realised that these were the people I was drinking with the last time I came to this event ten years ago.

The NAPF/PLSA has always been  and still is crusty and male and rather pale and it was only in the press room that I found most people were young enough to think of pensions as something in the future.

In the best session of the day, hosted by Emma Douglas and John Roe of LGIM, tables were asked what millennials and below were interested in. One table told us that millennials were only interested in profiting themselves and had no interest in environmental and social issues. This may seem extreme but it represented a stream of reactionary thought within the conference which I heard again and again in the wine bars and pubs I drifted through in the evening.

Young is as young does and there is still a divide between the progressive programming of PLSA’s conference and the regressive attitudes of many of the delegates and that divide will not be bridged any time soon.

steph 7

Diverse in location

I listened with care to the speech given by Nigel Wilson (pictured above). He, like his fellow Geordie, Helen Dean,  is in exile in London and he spoke feelingly of how Newcastle , Leeds , Manchester and in Steph McGovern’s case Middlesborough, were powering ahead through Brexit while the capital seemed bogged down remaining.

For as long as I’ve been coming to them, NAPF/PLSA conference have been held out of London. But I have never enjoyed the Edinburgh events which seem to attract the investment fraternity, I love to sit with people from the RPMI from Darlington and get a fresh perspective from parts of Britain London could learn from.

Pensions are about the whole of the UK and not just London and Edinburgh and the PLSA has got this.

Diverse in gender

I was very critical earlier in the week of the way the IFA event I attended was run for men with all the speaking being done by men.

At some point yesterday I asked whether people agreed with the majority of questions being asked anonymously through the conference app. It was gently explained to me that this was to give a voice to the people who had not asked questions in the past.

That is an indicator of how far the PLSA has moved since I have been away. There may still be a preponderance of crusty old men in the hall, but there are enough people like Jane there to make a difference.

Diverse in sexuality

and in case I was in any doubt that we weren’t in the heartland of LGBT, I got these wonderful tweets in the middle of the Steph McGovern session – which made my day!