I think Mike Harrison is right, hardly anyone is going to agree with me and the pension world over will agree with Mike.
Not me! I think we should make more of what we’ve got before demanding more of what we haven’t.
— Henry Tapper (@henrytapper.bsky.social) Sep 7, 2024 at 8:35
There will be a time when workplace pensions are worth the grief of a further pay-cut but that time is yet to come!
What Reynolds is saying
First;y, Emma Reynolds is making it clear that the Government wants some return on the £72 bn (gross) tax foregone to deliver us better pensions. This involves pension funds who have taken this money out of the Exchequer putting some of it back into the economy
Secondly the Government wants to see the returns that saver’s get , enhanced by better investment from bigger pension funds. The days of pouring £72bn down the plughole appear to be drawing to a close. Savers need value for their money and that means more than buying a pooled fund tracking the global markets.
Thirdly – and this could not be more clear, is that Emma Reynolds and I are in lockstep
Reynolds said increasing the proportion of worker wages automatically contributed to pensions under the UK’s “auto-enrolment” system could help people save for retirement but would not be considered until later.
This is going to come as a huge blow to those who have already booked revenues for the next few decades based on the promise of increased mandatory contributions under auto-enrolment promised under the so-called 2017 reforms.
They will now have to turn their minds to delivering value from the workplace pensions they run. They could for instance consider improving the conversion rate from pot to pensions relative to annuities that could be achieved by running DC schemes on as capital backed DB pensions.
The anticipated gains of 10-15% in lifetime income that are being achieved by pension pioneer , Pension SuperHaven suggest that people do not need to pay more to get more. That there are Christmas Bonuses on offer on top of the guaranteed income only adds to the fun.
Pension providers should stop moaning and start investing their member’s “hard-earned” money in “hard-working” investments and they should adopt innovation to help savers get pensions from their workplace pensions as previous generations have.
The improvements in pot-seize and pensions purchasable from those pots are a lot less painful to introduce through a Government conscious that the cost of living crisis is far from over.
Emma Reynolds was speaking to executives at the London Stock Exchange’s headquarters. The event focused on efforts to overhaul the UK’s investment and corporate governance landscape to revive the City of London.
The City of London is where I live and work. It generates massive amounts of money for the UK economy by being a world-class centre of financial services. It stands ready to deploy ordinary people’s money for the common good and to give people what they say they want.
When 1,500 savers into the Scottish Widows master trust were asked what they wanted from their savings , 80% said they wanted an income that lasted as long as they did.
Scottish Widows clearly get it. They understand what their customers want and I’m looking forward to meeting them later in the month so they can get it.
In the meantime, if Emma Reynolds looks at our submission which will be on her desk next week, she will find her efforts meet with my and my company’s full support!
Context
Emma Reynolds was speaking to executives at the London Stock Exchange’s headquarters.
The event focused on efforts to overhaul the UK’s investment and corporate governance landscape to revive the City of London.
You can read the full FT report on this link (free to early birds).