A happy 2019 to everyone!



Yesterday – the last day of 2018 – seems to have been one of the most acrimonious. So I’m going to close the book on yesterday and think of today and tomorrow. I’ll take my queue for 2019 from Kevin Wesbroom, who’s robust good humour always wins through.

Making retirement easier is hard –  fun – and rewarding.

A happy 2019 for me will be a year when Kevin’s words translate into action. I hope that by the end of this year , Royal Mail will have a pension scheme capable of paying pensions again. Right now it has a defined benefit cash balance scheme with a promise of a CDC scheme to come. That’s what Kevin’s referring to as what members “want and need”.

CDC will make retirement easier for postmen, listening again to the excellent moneybag broadcast on Saturday 29th December, I realised how much harder the retirements of the 3000+ steelworkers who swapped a pension for cash has become. If you haven’t listened to it, please do – the link is here.

The money that flowed out of the British Steel Pension Scheme was part of a much larger exodus that has transferred the problems of pensions to ordinary people. Since those transfers were made, world markets have been in decline, many people are drawing down their pension savings at a time when major indices are all over the place. One major index fell 5% in a day last week.

The postal workers chose to return to a collective arrangement, albeit one where only the company contributions were guaranteed. Getting their unions and their bosses to the table was a job, getting an agreed solutions another job and putting that solution to the members a job and a half; hard work- but fun and rewarding.

Kevin Wesbroom and many other friends of CDC have helped achieve something for postal workers that is entirely against the tide of individualisation of pensions. The implications  of Royal Mail’s scheme are radical.

In time, we can hope that everyone who has pension savings can have them paid as a CDC pension, even those who have previously transferred out of Defined Benefit pensions like BSPS.

Putting people in charge of their savings – a job worth doing

There are two other great pension projects for 2019, the first is to manage through the final phase of auto-enrolment – which will happen in April when contributions go up again. The public’s confidence in spending on the future is being sorely tested at the moment. It’s not just the falling markets, it’s the political uncertainty. Any form of investment that involves tying up money for years to come is scary to people.

Look at what is happening to pension contributions for ordinary people and you will see how challenging auto-enrolment will be to people’s finances.

Period Employer contribution (minimum) Employee contribution (minimum)
Currently until 5 April 2018 1% 1%
6 April 2018 to 5 April 2019 2% 3%
6 April 2019 onwards 3% 5%

We have to make people confident that they will get a good deal (value for money) from their pension savings. That means paying up on Government promises on savings incentives, it means banishing rip-off charging structures from legacy pensions and it means driving out the charlatans who steal people’s pensions for a living. These are the hygiene factors of good pension governance and pursuing good practice in the business as usual of pension saving is particularly important in troubled times like this.

The second great project for 2019 is the pensions dashboard project, one that is occupying our time over Christmas as we prepare our consultation responses. Getting the dashboard architecture right is critically important, we’ve been close to giving people the information they need to see their pensions in one place before. It was 15 years ago that the “combined pension forecast” was first promoted.

If we are to get people to save money into pension savings plans, we need to give them help in bringing all the pots together – visible in one place – together with the promise of state and occupational pensions (including CDC).

I see the promise of proper information as critical to restoring confidence in pension savings. With ordinary people seeing their pension contributions increasing in a couple of months to 5% of band earnings, it’s crucial not just that we get issues like the net-pay anomaly sorted , but that we give people proper information about how their pensions have done.

Remembering the basics

Let’s return to Kevin’s brilliant tweet

Somewhere along the line we seem to be forgetting the basics – CDC delivers a pension benefit in the form members want and need – without complex decision making on their part

Let’s use 2019 to make CDC legislation happen, to get auto-enrolment up to full speed and have a pensions dashboard in production within the Single Financial Guidance Body.

This happens to be the agenda for a Pensions Bill we hope to see announced in the Queen’s Speech. We can all do our bit to help these things happen by remembering what we are about.

The people who read this blog either work in pensions or are fascinated by them. We have a professional interest or are enthusiastic amateurs. Most people consider our professions with distrust and bemusement. It is within our grasp to change things. 2019 can change things.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to A happy 2019 to everyone!

  1. Robert says:

    With DC, your beneficiaries receive your pension upon death. If CDC legislation happens will it provide the same death benefit?

  2. Peter C says:

    I’m sorry, guys – I still see this as Harry Potter pensions.
    I class it with banks selling interest rate hedging (which wrecked thousands of businesses, and the economy), and the original pension freedoms promoted under Margaret Thatcher (comment at will).
    At best, it’s a buzz phrase that consultants use to get the in the door. However, once in, you have to spin it up to earn a fee.
    Tell me – anyone – the terms on which you would switch YOUR OWN pension into CDC, please.

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