A comment over the weekend from Jnamdoc in relation to the criticism of CDC in the Telegraph
Sadly, I’ve noticed a good number of articles this last week all in effect challenging the innovative thinking quickly emerging about the delivery of pensions for working people that are supportive off and supported by investment and growth over the whole life cycle of the worker and pensioner journey.
Journalists love to receive or be planted with stories, so it gets you wondering if what we are seeing is some coordinated response to these growth orientated solutions to pensions? And who would benefit from the status quo where all roads lead to annuities, and in a (by regulation) low growth model.
We are our own denigrators.
The Telegraph ran another article
How fragile it would seem the retirement plans of Brits looking to draw money from their pension pots.
Market mayhem – pension panic – who says?
What is the source of this nonsense? The answer can be found in this post
The SPP has actually published “for free” a frightener for mature savers who have either got lucky with DB pensions, are getting by with their state pension or 20% down in their drawdown. Guess what the story is.
OMG, tariffs are hitting hardest on savers exposed to equities, especially diversified global equities “Britain can’t retire anymore“.
The SPP have decided that planting desperate stories of DC losers in the press will make for a responsible SPP. They list and thank
The Telegraph & Szu Ping Chan for covering, along with GB News, Sky News, Daily Express, Daily Mirror, MSN, Yahoo Finance, Financial Reporter, Birmingham Mail, PensionsAge, mallowstreet
Press panic is not good news for “pensions” or for “growth“.
If you read the SPP document and are about to be or in “drawdown“, the SPP’s advice is to beat a path to a financial adviser and pay him money to manage your pot “to navigate the fallout” – as if anyone can manage the mess tariffs make of a free market.
If you are an employer or fiduciary or the kind of saver who reads documents of this type, a bulk annuity can be arranged. If you are a journalist, I bet this kind of document is exactly what you want. If you are a consumer needing help, go talk with a financial adviser.
This six page document should be promoting a message of growth, not a call to de-risk pension pots from the next Trump.
It tells the press that there is a story here .. a bit of panic to publicise
Given the scale of the equity market falls since
early April 2025, and the fall in government bond
yields, it is possible that some DC savers may see a
reduction in potential retirement income of up to
20%. Given the speed and volatility of such moves,
those individuals may decide to delay taking their
pension where possible. This may be a sensible
step if markets are to recover in the short term but
unfortunately nobody knows if a short-term recovery
is likely. Deferring retirement means the savings pot
remains invested and has the potential to grow but
the plan value can go down as well as up.
But heh, the Society of Pension Professionals know better than to panic..
For those depending more directly on the
markets for their retirement income, such as
those in Defined Contribution schemes, it is
important not to panic, to remember that pension
investments are designed for the long-term and
are frequently subject to bumps in the road.
Whether the dotcom bubble (2000), the financial
crisis (2008), Brexit (2016), or Covid (2020), the
stock market has endured several sudden and
sizeable falls this century but recovered over
varying lengths of time.
As Jnamdoc puts it
Journalists love to receive or be planted with stories, so it gets you wondering if what we are seeing is some coordinated response to these growth orientated solutions to pensions? And who would benefit from the status quo where all roads lead to annuities, and in a (by regulation) low growth model.
Just plain wrong!
” …. and the fall in government bond yields, it is possible that some DC savers may see a reduction in potential retirement income of up to 20%.”
The yield on all long term (over 3 year) UK Government bonds is nearly 1% HIGHER than it was a year ago, so if you are saving for a pension using government bonds your expected pension income will have gone UP by say 13% from your new investments. If you already hold the bonds your income has not moved at all.
It is also out of date; since mid April global equities have recovered and are now something like 13% below their January peak, The January peak being itself a bit of a bubble and as you have pointed out in previous blogs global equities, even now are something like 9% up on this time last year.
Doesn’t say much for so called “Pension Professionals”
It is indeed unfortunate that the press release has been so widely picked up in the popular press.
to be fair – this has chopped and changed over the last few weeks and the paper will have been written earlier than the release date – yields did fall for a bit last month and may do again, we’ll see!
Look at 10 and 30 year gilt yields over the last month – all over the place so could say they have fallen or they have risen depending on which day of the week you choose – respect to SPP for having a go at getting something “informational” out there for the wider masses. This doesn’t look like it was designed with pension professionals in mind so cut them some slack!
Actually I think the SPP have done a good thing here – reassured about the state pension, local gov pensions and other DB schemes, reassured that whilst DC had been badly affected, stick with it for the long term and all will be right in the end – a solid message for any worrying consumer surely or am I missing something?
If defending the SPP, it’s “professional” to declare any interests.
I presume these two comments above are from
Josie Horton, a Social Researcher at the DWP, also a member of the Society of Pension Professionals (SPP).
The SPP claims to be a representative body for various professionals involved in the pensions industry, including actuaries, lawyers, and consultants.
Some time ago we had a presentation from Andrew Smithers which sounded the alarm bells on markets. With Trumps mad antics now there is much riding on the administration never having meant a word it was saying.
So many vulnerable tipping points lining up for a domino effect.
CN you get Andrew back for an update for a Tuesday session?
I can see both sides of the argument here but are we really saying pension professionals should never publicly comment about the most topical pensions issue of the day? Henry, you are concerned (like government is obsessed) about the growth message, well the SPP has done some pretty good analysis and recommendations on this over the last 12 months, so you may want to have a read – Solving the UK Investment puzzle being a good read last year:
https://the-spp.co.uk/wp-content/uploads/SPP-Paper-Solving-the-UK-investment-puzzle-September-2024-1.pdf?v=3763
Great to see so many professionals (most of whom normally stay silent on these blogs and comments by trustees and others) rallying to their defence of the SPP this morning.
I have my suspicions about who KK10 and Tina not Turner are, but I’m sure Henry knows all of you.