I’m very pleased that we have Neil Walsh of Prospect at the Pension PlayPen at 10.30 am tomorrow (Tuesday 21st July).
We will discuss how unions are getting to grips with CDC as a way forward to what are currently DC workplace pensions.
You can get into the meeting on this link
Join here for DC pensions with a collective target
Every pension used to have a target….
What we were used to – no longer available to workers in the private sector
Since the collapse of Defined Benefit pensions first for new joiners and soon after for further accrual by those already members, the unions have fallen out of love with workplace pensions. Indeed many (led by Terry Pullinger) refuse to acknowledge DC working “pensions” as much more than savings schemes. This is a shame. Unions over the last 100 years have helped form a system that is often called “deferred pay”. Lately the CWU in its conversation with Royal Mail, started referring to a new kind of pension, one that it called a “retirement wage”.
Unions made sure there was a way back for postal workers
For both Royal Mail and its unions, the importance of employees putting money by and their employers making at least the AE minimum into what was awkwardly called a “collective defined contribution scheme” was the starting point for a revival in interest in a pension scheme that employers could fund and members get a wage in retirement.
Unions can now include pensions in collective bargaining.
If you see pensions as deferred pay, then pension contributions made by employers are a part of the settlement with workers and their representatives – typically the unions.
As employers and unions enter into bargaining this year, we can expect that not just wages today but deferred pay will be in play. That is because the unions see the efficiency of a collective arrangement, even if it lacks the guarantees of defined benefit schemes, is a step in the right direction.
If the first stage for an employer is to talk of what kind of workplace pension they will offer, then a way back to what unions recognise as “pension” is underway. If both unions and employers recognise the value of CDC as a means of deferring pension then improvements become part of the settlement.
This not need be adversarial
I am no longer a member of a union and the pension officials of unions rightly see me as a long way from the workers that they chiefly represent , I being immersed in pensions.
But I have found that in my discussions as I talk with union officers (whether inside or outside their pension departments) a wish to move pensions on and to work with those who are delivering CDC.
The unions voice is insistent and should be listened to
I do not yet hear the voices of unions in pension conferences or unions regarded as influential in discussions within pension circles ; this needs to change.
So I have asked one of the pension officers who I have met to come and talk to us about how unions are reacting to the new legislation surrounding CDC pensions and the regulations that will be delivered through TPR’s CDC code in only a fortnight’s time
An invite to you to find out more about unions and their changing attitude to pensions
A conversation about the union’s influence on workplace pensions going forward
Neil Walsh is both a pension professional and the pension officer of Prospect Union. So he can see CDC from the perspective of both a pension insider and a member representative.
Henry Tapper, a well-known enthusiast for CDC, will be talking with Neil about how unions feel about CDC on Tuesday (21st July
We will find out how unions feel about DB and DC. We’ll find out if CDC can bridge the pension income gap and help peopleplan their later life with a retirement wage rather than a pot full of money
Once again and to end….
The event is at 10.30 am on Tuesday 21st July. You can get into the meeting on this link
Join here for DC pensions with a collective target
https://www.resolutionfoundation.org/app/uploads/2026/07/The-great-escape.pdf
The Resolution Foundation has published ‘The Great Escape’, asking, ‘Why Britain is stuck in a fiscal funk and how we can break free.’
The report’s key findings are:
• Britain’s growth slowdown since 2007 has left total tax receipts around £450bn a year below their pre-financial crisis path. However, slower growth has meant slower private sector pay growth and with that, slower public sector pay growth (saving £110bn) and welfare spending (£100bn). Together these offset almost half that £450bn tax hit.
• An older and sicker population has increased annual fiscal pressure by around £90bn. Worsening health (only 20% attributable to ageing) has been just as important as demographics.
• Meeting the rising ill-health costs has meant deep cuts elsewhere. Resolution calculates that health-related spending now accounts for £1 in every £4 of non-interest spending (interest on debt is about 8% of the overall total spending). Real per capita local government spending – which presumably is a subject dear to the new Prime Minister’s heart – has fallen by 15% since 2007.
• Resolution shares the OBR’s fear that the UK is on an unsustainable fiscal path, with debt peaking at over 300% of GDP by 2075. The report also warns that if the £43bn of announced tax rises so far in this Parliament are not delivered, long-term modelling shows debt would be on track to hit 200% of GDP as soon as 2050.
Resolution makes the following recommendations to address these issues:
• The government should run a current budget surplus of at least 1% of GDP outside recessions so that the budget is balanced on average across the economic cycle. Reeves’ target is/was to get the current budget in the black by 2029/30. A 1% current budget surplus implies finding around £30bn extra in revenue outside recessionary periods.
• At the same time the government should address what Resolution calls “inherently unsustainable policies”:
o Replace the State Pension triple lock with a smoothed earnings link, and
o Establish a beefed-up plan to fully replace Fuel Duty receipts (worth £24bn in 2025/26) as electric vehicles hollow them out. The eVED (aka EV road pricing) announced in the Autumn Budget 2025 is projected to raise less than £2bn by 2030/31.
• Work to recover the public services productivity lost since the pandemic, which amounts to 3.2% on the ONS’s headline measure and ensure the improvements deliver cashable savings rather than an expanded state.
• Resolution also wants to see a strengthening of the institutional framework. It envisages this will mean:
o Requiring governments to publish a medium-term strategy for the size, shape and financing of the state (responding to the OBR’s FRSR work), and
o Providing more information to voters during election campaigns, for example through greater scrutiny of party manifestos, including Australian-style OBR costings.
Thoughts
Resolution makes a telling point for a Prime Minister who has spoken of growth in every postcode:
“Faster growth is key for family finances but, contrary to what politicians of all stripes may think, it is not an escape route from hard decisions, not least because rising wages will gobble up much of the extra tax revenue. Quick fixes might be tempting but fare no better.
Wheezes that loosen the fiscal rules and increase borrowing – exempting defence spending from the fiscal rules or extending the forecast horizon to ten years – are not serious and fail to recognise the predicament we are in, risking a destabilising rise in borrowing.”
Maybe it is time to scrap the State pension for all those under 25 and replace it with mandatory savings, as in Singapore, where the neediest are provided with income in excess of what they earned during their working lifetime.
UK CEO of public companies can do without and store some of the 130 times the UK median wage rather than taking uplifted 60ths
I expect to be disappointed as someone who spent 90%+ of my 50-year working life as self-employed. a sector ignored in most pension debates.
You may be needing your surplus soon. SpaceX is a timely illustration of the This Time It’s Different”principle. Barely five weeks after its record-breaking IPO at $135 a share, the stock closed Friday at approximately $124 after a run of consecutive declines, more than 40% below its mid-June peak.
The most likely people to buy into U.K. infrastructure are now facing a 40% hit before passing the income taxable benefit to the next generation.
So the parent will not wish to have an illiquid investment. Unless an IHT exemption is made for those that do invest in infrastructure. The Supermarket REIT structure could be cloned to deliver the right mix of dividend (5%) and long term infrastructure investment to the next generations beyond the children potentially in perpetuity.
You may be needing your surplus soon. SpaceX is a timely illustration of the This Time It’s Different”principle. Barely five weeks after its record-breaking IPO at $135 a share, the stock closed Friday at approximately $124 after a run of consecutive declines, more than 40% below its mid-June peak.
The most likely people to buy into U.K. infrastructure are now facing a 40% hit before passing the income taxable benefit to the next generation.
So the parent will not wish to have an illiquid investment. Unless an IHT exemption is made for those that do invest in infrastructure. The Supermarket REIT structure could be cloned to deliver the right mix of dividend (5%) and long term infrastructure investment to the next generations beyond the children potentially in perpetuity.