2022 has dawned rosy! There is optimism that the worst of the pandemic is behind us. Cases are at an all time high but we are building immunity through vaccinations
Though many will find it harder to save as real earnings fail to meet current inflation and likely rises in interest rates, people’s retirement savings continue to prosper.
We are at last seeing the positive impact of deficit contributions and de-risking reflected in DB funding levels. Our pension lifeboat is strong and auto-enrolment is powering a new confidence that private sector pensions can substantially improve savings ratios.
Technology is bringing greater transparency to pensions. We know much better where we are investing, the value we are getting for our money and the costs we are incurring in funding our retirement.
These are the positives. 20 years ago, things were not looking so rosy. Next year will be my 40th working in financial services and I hope that by January 2023, further progress will be made.
I’ve listed what I most want to see progress on in 2022 below. Please feel free to add yours in the comments box or mail me at email@example.com.
You will notice that some of the longstanding themes of this blog are missing. I fear that though our pension taxation system is broken, we do not have the political energy to fix it. The agenda for change is too packed to review taxation in a major way.
Nor do I see it as possible at this moment to better integrate the benefits system (including the state pension) with private pensions. Means testing is with us to stay, for all the inequalities it brings. We can only hope that in 20 years time, dependency on state benefits is reducing as private pensions become more valuable and more valued.
So here are my ten priorities for change in 2022.
- The State Pension needs a spring clean. Let’s hope that the bugs in the system that have led to many people being short-changed get fixed. This has to be priority #1 but I hope it leaves resource at the DWP for other matters.
- We need to make quick progress with the pension dashboard. It’s not just the job of the Pension Dashboard Program, it’s the job of all responsible for our pension data to get it fit for publication from 2023. We should not be distracted by vanity projects like statement seasons but focus on the main event – finding people’s pensions and pension pots and helping them make the best of them.
- We need a means to convert pots to pensions that everyone can use. CDC should not be the preserve of enlightened employers, it should be a free to access scheme pension for anyone who doesn’t want an annuity or to self-manage their retirement income.
- We need to make our pension funds into productive capital but to do so efficiently. We need to access private markets in a sensible way and not pander to tub-thumping politicians.
- No investment decision should be made with out money, without due regard to its impact on the planet.
- We need the FCA to raise its game following the publication of the NAO report on BSPS. We need to revisit the role of RAAs and what TPR means by “protecting the PPF”.
- A decision needs to be taken over the proposed DB funding code. The current consultations cannot continue indefinitely.
- TPR should accelerate its assessment of the Pension Superfund and it, Clara and the various DB master trusts should consolidate the many mediocre DB schemes holding back UK corporates from competing as they should.
- The DWP should press ahead with its plans to consolidate DC occupational schemes. We need fewer , more efficient pension schemes delivering better value for the money we are saving.
- The FCA should look at the value of advice and start testing the outcomes of advised SIPPs against non-advised counterparts. They should do this by testing the outcomes of the pots they analyse in their retirement income survey.
The Sun we haven’t seen over Christmas is fighting it’s way into 2022. pic.twitter.com/PbGfGyQ422
— Henry Tapper (@henryhtapper) January 1, 2022