Can we AFFORD the flexibility of drawdown and the certainty of an insured annuity?

Posted on March 16, 2026 by henry tapper

 

Not everyone can afford the flexibility of drawdown or a costly annuity.  CDC is a better way for ordinary people to get “deferred pay”. We want to make retirement affordable for many more of us.

The freedom we were given in 2014 by George Osborne was from having to buy an annuity. The individual annuity is a luxury product for those who can exchange their pot of pension savings for certainty. My friend Mark Ormston rightly calls this a great time to buy an annuity if an annuity is right for you. For people who can afford to buy certainty, annuities provide it. The same can be said by the end game for private DB schemes who buy annuities in bulk.

But as means of providing deferred pay for the ordinary worker, an annuity cannot provide the income people are expecting and needing. This will be realisation people have when they see their pension pots expressed as “estimated retirement income” (ERI). This income will be based not on an income increasing by inflation but level (so falling behind inflation immediately). Even when the annuity is paid flat, with no increases, it will show the fall in pay people will get, even taking into account the state pension when they get to 67+.

As Hymans and Royal London have pointed out, we will on average find ourselves £12,000 pa down on the retirement we need in retirement. They call this the State Pension shortfall because you’d need to be paid your State Pension twice, to bridge the shortfall of your deferred pay in retirement.

That assumes we buy into the certainty of an annuity with the low average pots we have accumulated. It is only with the help of private and public DB pensions that many people can have the luxury of swapping their AVC pots, their legacy personal pension saving pots and their recently accumulated workplace pensions – for an annuity.

Those that have the means to swap pots for certainty will find great brokers like Retirement Line to help them do it, but they are not ordinary people, they are people who know what they are doing.

There will be a new kind of annuitant in years to come. Nest has used its enormous muscle to get a good deal for those who keep their money in Nest and survive to 85. They will be bought out of their pots and into an insurance arrangement underwritten by Rothesay. Between the point when they start drawing down on their pot (with the help of Nest) they will have the flexibility to spend their pot as they like but there is no certainty of the income they will get at 85 if they spend the pot as they like.

We have not seen the results of the work done by Nest for those taking their retirement guidance on the deferred pay they will recommend but my bet is that it will not delight most Nest savers. That’s because Nest will target a residual pot big enough when the savers makes 85 to keep paying deferred  inflation linked pay from an insured annuity.

Here is the sad but honest truth. We cannot have total flexibility, while having certainty unless we have enormous amounts of money. If we have a lot of retirement money we don’t need pensions and can use (until next year) our pension pot as a means for our successors to pay the inheritance tax bill we leave them if we die before 75. But that is not for those who Hymans and Royal London describe of a State Pension worth of income to make ends meet in retirement.

This brings me  to the alternative to buying an annuity when retiring or even on a “flex and fix” at 85. That alternative does not provide people with the flexibility of drawdown (what Nest will give you) but does give you up to 60% more pay than you would get from buying an annuity. That might and probably will not be enough to bridge the State Pension gap for many people but it will do something for them if they swap their pot(s) for retirement income. This is what will be coming our way in 2028 and will probably be up and running from some commercial master trusts. It is called Retirement CDC  – it’s a swap of pot for pension.

But for those who are saving for a retirement that’s not upon them today, then it will be possible for them to buy pension as they go along from a CDC whole of life pension scheme. This type of scheme has been a long time in the devising but it is now legislated for and from this summer, CDC pension scheme will start getting authorised.

These are the type of CDC schemes the Government reckon will pay up to 60% more than an equivalent annuity and for those who join such a plan, they will get better pension for their money over time. At a time when we struggle to save what we do into a pension pot, we may find the CDC answer a simple way of making our retirement more affordable.

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Thoughts of accountants on the use of Pension Surpluses in DB

Posted on March 15, 2026 by henry tapper

Pensions Oldie is I think an accountant.  Here are his thoughts following my blog on employer strategy from Hymans Robertson

Pension Oldie

I agree that the webcast is an excellent review of the current position and the matters to be considered by all employers, who are the party that will ultimately determine the success or otherwise of the occupational pension system in the UK.

My own views with a 40+ year experience of occupational pension arrangements is that in 30 to 40 years time we will look back on DC pension arrangements as a failed experiment.

The reasons they will be regarded as having failed may still to be determined but I consider that they are likely to include the diversion of attention from the objective of providing retirement income instead viewing them as tax subsidised savings vehicles, distancing the employer from the pension outcomes of the employees past, present and future; but primarily through the extraction of profit by third parties dealing with all aspects of the administration, investment, and payment of pensions. The consequential question of where those profits are ending up and how far they contribute to the UK economy is likely to prove far more significant than any mandation of investment policy.

My own 40 year prediction from my past 40 years experience would be a return to favour of single company DB arrangements, possibly on a shared ambition basis.

In the meantime, employers should open their minds to all the alternatives available and perhaps as Hymans suggest take a watching brief while both the Government (perhaps through the Pensions Commission) and the industry opens up new opportunities. This is likely to be more significant to long term employer survival than seeking to maximise short gains from surplus refunds paid out as dividends or used for share buy-backs while enhancing past service benefits for previous employees beyond those required to protect the real value of their pensions.

Derek Scott is an accountant and responds to Pensions Oldie as one to another!\

In reply to Pensions Oldie

Agreed, PO, but we desperately need a change in present day accounting standards to give management more incentive to run on DB schemes or use DB surpluses to part fund DC or CDC.

Estimates of pensions deficits that arise from informal promises or expectations arguably fail the strict tests for a present obligation, reliable measurement, and “no realistic alternative” that are used to justify balance sheet recognition as a constructive obligation; in many cases they arguably better fit the definition of a contingent liability, warranting disclosure in the notes instead.

Conceptual arguments
• IAS 37, Provisions, Contingent Liabilities and Contingent Assets, requires a present obligation (legal or constructive) from a past event, with no realistic alternative but to settle, before recognising a provision. Where an employer can still change, cap or terminate a scheme or discretionary enhancements, and/or reasonable investment returns may be expected to settle liabilities and reverse a current value dip, there is arguably still a realistic alternative, so the obligation is contingent, not present.
• IAS 19, Employee Benefits, extends this perverse logic by bringing in constructive obligations from informal practices (for example, a history of benefit increases) into the estimated pension measurement. But whether those practices genuinely create an irrevocable commitment is judgemental; if employees’ expectations are not enforceable or could be changed without “unacceptable damage”, the obligation is conditional on future management intent, not a present obligation.

Measurement uncertainty
• Estimates of defined benefit deficits depend on long‑term actuarial assumptions (discount rates, pay growth, longevity, inflation) that can move the estimated liability materially with small changes. IAS 37 treats obligations as contingent (footnote-only) when the outflow cannot be measured with sufficient reliability.
• For many schemes, the “deficit” on IAS 19 differs dramatically from the funding basis actually driving contributions, because funding valuations use different discount rates and risk assumptions. Recognising a single headline deficit as if it were a firm obligation overstates precision; footnote disclosure better reflects the range and conditionality of possible outcomes.

Economic vs accounting obligation
• Companies can report an IAS 19 “surplus” yet still be required (by funding agreements or regulation) to make “deficit reduction/repair” contributions, showing that the recognised pension position may not track the economic burden. This weakens the case that the booked pension number is a faithful representation of a present obligation.
• Conversely, deficit estimates that rely on assumed future benefit improvements (treated as constructive obligations) may never materialise if business conditions change. In economic terms these are options or intentions, not liabilities; presenting them as contingent in the footnotes allows users to see the potential exposure without implying an unconditional obligation.

Faithful representation/true-and-fair-view and neutrality
• Constructive obligations for pensions rest heavily on management’s past practices and implied promises, which are inherently subjective and susceptible to bias. Recognising large balance sheet liabilities based on such soft evidence risks undermining neutrality and comparability of accounting.
• Footnote treatment as contingent liabilities would still require robust qualitative explanation of pension plan terms, funding policy, and sensitivities, but avoids embedding speculative amounts directly in equity and leverage ratios. This can produce a more faithful representation where the boundary between present and future obligations is especially blurry.

User understanding
• Analysts and creditors often already adjust reported pension numbers because they see gaps between accounting measures and economic risk; research shows markets previously “priced in” off‑balance‑sheet pension deficits when transparency was lower. This suggests that sophisticated users can work with footnote disclosures rather than relying on a single recognised figure.
• Treating pension deficits related to constructive obligations as contingent note items lets users model their own scenarios (eg different discount rates or benefit policies) instead of taking management’s prescribed accounting assumptions as if they were certain, improving decision usefulness for valuation and credit analysis.

Pensions accounting under FRS 17, Retirement Benefits, and IAS 19 has been anything but “neutral”, leading to the closure of the majority of DB schemes in the UK and changing investment policy from a bias for real growth and income to one based on “matching” with low-yielding gilts and other bonds where the assumed inflation hedge is far from perfect in practice.

In addition, use of DB surplus to part fund DC or CDC, while cash flow neutral, is not earnings neutral under present day accounting.

This is incredibly useful, even to those who aren’t accountants, in understanding the use of surpluses. DC and CDC should be friends to DB surpluses!

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Is this the best that the insurance lobby can do?

Posted on March 15, 2026 by henry tapper

 

The insurance lobby have teamed up with Pensions UK and the right wing press to derail the pension schemes bill. They have landed on a Clause 40 which gives any Government the opportunity to demand money is invested for the good of the country.

There is so much to do to get adequate pensions for millions of savers not in public sector pensions and not in funded DB schemes like LGPS, RailPen and USS.

Can we please stop making so much fuss about mandation? Relative to what Royal London and Hymans recently referred to as the State Pension gap (the £12,000 pa  people are on average short of) – mandation of investment is a sideshow.

I have to admit that when Rachel Reeves came up with mandation well before the election, I thought there would be trouble here from trouble-makers. I thought right.

Here is what articles in the Times have as their headlines.

Pensions UK gave the lobby trying to wreck the pensions schemes bill nearly an hour to spout this line and I am so sorry that I had to sit through Helen Whatley’s scripted rant.

The Times opens up its most recent rant with an attack on this Government as having it in for workers saving for their retirement.

Plans to force millions of pension savers to invest in high-risk investments will put retirements at risk, the government has been told….

and it goes on

But the pensions industry has warned that having your life savings invested in political vanity projects could cost lower-paid savers dearly while those with gold-plated public sector pensions will not be affected.

I am not the “pensions industry”, even if I work for better pensions every day of the week.

It is wrong , as I told Helen Whately , to see the ABI and Pensions UK lobby position as the position of the pensions industry. What we as a whole want is adequacy for everyone.  To suppose that what is going on is a Government trying to hi-jack pensions to get it out of trouble is fantasy. It’s been dreamt up by lobbyists who’d like to derail the use of DB surplus for the country (rather than the shareholders of insurers), It is picking at the detail of CDC which is a  way to improve on workplace pensions.

As with DB which the ABI see as a deferred bulk annuity, so DC is to them a kind of deferred annuity using “flex and fix” into retail annuities .

Who is behind all this nonsense?

The trade bodies Pensions UK and ABI have called for Clause 40 to be cut from the legislation entirely. Their  spokesperson is Yvonne Braun. Here is her argument

Braun said that while the Association strongly supported investment in the UK, it must always be driven by the savers’ best interests.

“Any power to mandate how pension funds invest, if used, creates a very real risk of artificially inflating demand for certain assets. This is fundamentally against how investing should work and increases the risk of asset bubbles that can deflate or burst, with savers bearing the cost,”

The Times concludes that its readers can only escape the defaults hi-jacked by Labour by opting out. Steve Webb is roped into their argument with his answer to the question

“Can savers avoid it?”

One way to avoid mandation is to opt out of the default scheme on your workplace pension, but this brings its own issues,

said Webb.

“You’ve got to know what you’re doing. OK, you don’t want to be in the fund that the government is controlling, but what do you pick? Do you pick the global equity fund, or the balanced fund, or the sustainable fund?”

Savers may opt to move their money if they feel that a particular fund no longer works for them, but they may end up paying more in fees in the long run.

Steve Webb and Ros Altmann have been quoted in this article. I know both and I know they are not against policies that get growth back into our pensions. Clause 40 is not worth the bother – Steve , Ros and other good people – let us not be captured by the ABI’s opposition.

I am ashamed that we are being allowed to be characterised as a part of the ABI lobby that has become the ABI/Pension UK lobby. I am shocked that sane voices such as Steve Webb’s are being used as part of an article that echoes Helen Whately’s opposition.

Can we please turn our thinking to how we can be on the side of pensioners as well as Pensions UK. Right now , I cannot do both.

 

 

 

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Hymans discuss the challenge and opportunity for bosses to pay adequate pensions

Posted on March 15, 2026 by henry tapper

For Methodists and Presbyterians among you, Calum and Mark discuss pensions strategy with the church the Wesley brothers preached  their post-ignition sermon in clear sight behind them. The church is now presbyterian but it has a Wesleyan root!

Calum is Scottish, Mark is English , they are both passionate to make retirement adequate for those who get pensions from the trusts and employers they advise.

Here is an excellent alternative to the LCP podcast I wrote about earlier this morning.

Mark is producing a report on adequacy. I think the essential question is whether employers focus on adequacy or flexibility or try to find ways to do both. I suspect some rich employers with well paid staff may focus on the flexibility of “fix and flex” drawdown from DC and those who have to prioritise adequacy for their staff, will move to CDC.

The boys want employers to take a step back and strategize, as Calum tells us

“I have had 20 years consulting and I have never seen so many balls in the air”

Having spent a few days in Edinburgh where these questions were not being framed with quite the cogency that Mark and Calum frame them, I advise you spend ten minutes with them and then consider where your employer is on this!

Challenge and opportunity

I do not see the debate being just between the Finance Director , the Human Resources Director and the employee benefit consultants. I see the workers voice arising through unions who see an opportunity to press for adequacy rather than flexibility and I see the richer employees wanting SIPPs rather than CDC!

Most large employers have heard demands to keep DB schemes open, then pay more into DC, now the demand from workers and unions may be wider, especially with a pension dashboard spelling it out to ordinary pension savers.

There is a challenge here but there is also an opportunity.

The State Pension Gap

Mark Stansfield’s work suggests that there is typically a £12,000 pa gap between what pensioners need and what they get. This echoes recent work by Royal London which is referred to as the state pension gap.

Calum sees this as a £250,00 shortfall in the pot. The Pensions Commission is due to report on this gap and gaps based on gender and ethnicity too. Bottom line is that “adequacy” is an issue for everybody. For Pensions UK and the ABI, the answer is to increase contributions from payroll into workplace pensions from 8% of band earnings to 12%. Unfortunately that is not happening either at the employer or Government policy level.

Mark points out that at some point after October 2026, individuals will see their pots presented as pension on their phones and other devices. Even if the presentation is of annuities purchasable as level income, they are unlikely to make for comforting reading for ordinary people. Employers will need to move nimbly and move early, if they are not to suffer a backlash from staff feeling cheated.

Compliance or Competitive Advantage?

For most employers, compliance with the pension rules that will follow the enactment of the Pensions Bill will be all that bothers them. For a substantial minority, competitive advantage will be the drive (or perhaps fear of dissatisfied staff and their unions).

Calum and Mark ask if there is an early mover advantage for employers who want to upgrade their pension offering. For such employers, the pension offered to staff is second only to salary and I can see progressive employers moving towards whole of life CDC rather than offering less pension in favour of flexibility. But there is a type of employer who will go towards defending freedom and flexibility and some towards the kind of pension that staff expect from the state and from time in DB schemes.

What should employers do?

Calum and I have a little discussion about what might follow in the months to come. I include it here but if you click through to the comments you can see not just this conversation but useful comments from Richard Smith and others.

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Sam Cobley gives LCP’s view on CDC pension and DC flexibility

Posted on March 15, 2026 by henry tapper

This is a blog about CDC and if you are interested in the subject, I recommend you listen to it. Sam has a very similar career path to Nico  (through banks and consultancy) and while Sam’s still at LCP and advising on £13bn of assets, he sees CDC as an option for DC plans to take on. He is rather optimistic for CDC than the sceptics!

LCP’s Sam Cobley

There is an alarming return to the 70 minutes+ podcast but this is to accommodate an initial discussion of a week when Nico and Darren have been in and on the fringe of the Edinburgh pensions festival.

Is CDC good Value for Money?

The question that the discussion between Nico and Sam have (Darren claiming to be out of his depth) is whether we are seeing the formation of CDC schemes for the whole of people’s lives. I suspect that apart from the Church of England’s affiliated employee scheme (managed and advised on by LCP) , TPT’s and the emerging Pensions Mutual, there are but three schemes. I know of one other consultancy looking to launch an UMES whole of life CDC, but they have yet to show their hand.

For the most part, interest has been not in the transfer of contributions and assets into a whole of life CDC but the Retirement CDC for which we should have legislation by the end of the year and – following the previous pathways, the opportunity to launch a Retirement CDC some time in 2028 or 2029.

For Sam, the interest in CDC is as a choice for trustees and commercial providers and it is quite likely that CDC will be offered as the default for some (WTW made it clear that was the direction they were taking Lifesight, at the Edinburgh Pensions UK investment Conference.

LCP has a largish CDC consultancy team headed by Steve Taylor for whom CDC at all stages and Sam had to pick his way past potential in-house disputes, he being a DC man.

Sam has CFA and is not an actuary and he sees life slightly different from say Adrian Boulding. Sam is an investment man , Adrian an actuary. Sam likes DC, Adrian likes adequacy and Nico definitely prefers the certainty of DC even if that certainty is less than optamistic.

Here was the article Sam published in late January explaining that the (up to) 60% improvement in pensions from CDC depended what you compared CDC to .

If you invest in good advice and upgrade your DC plan (with a consultancy like LCP) you will narrow the 60% considerably. Hymans (who advised Nest to a flex and fix) and LCP who invented the phrase and concept of “flex and fix” are clear in their head that DC can do better than trail CDC by 37.5% (the other way round of looking at CDC doing better than 60%). Chris Bunford, who worked at LCP on Church of England’s putative UMES CDC has been clear that the amount that CDC provides better pension is something between 30-40% and the 75% the PPI claims.

So Sam was not going to retread his paper and explain, as my friend and actuary to Pension Mutual’s developing CDC scheme, explains it, that even if CDC got people a 20 or 30% pay rise for the rest of their lives, it would have done well.

Of course Sam is keen to point out that having a better pension is one thing, having the flexibility to draw your pot as you choose (as you can do till the flex is swapped for an annuity fix – say at Nest’s 85) another.

What price flexibility?

The choice will be I suspect between giving people relatively little pension and maximum flexibility and maximum pension from a CDC, but not much flexibility.

I had a good discussion with Janette Weir of Ignition House, which touches on the bulk of this podcast. Her point was that when you look at what is actually done right now, it backs up the view that CDC will be 60% better in providing lifetime income but only if people are after a pension. Sam makes the point that most people say they want an income , but when it’s explained that this does not mean flexibility, they aren’t so sure.

Here is the central question. Are we after adequacy, in which case we go down the CDC route, or are we after flexibility , in which case flexibility will always win.

My view (for what that’s worth) is that posh people who pay for advice will want flexibility , while ordinary people will find the simple pension of CDC more practical in helping them live their lives with greater comfort or at best “adequately“.

So we are likely to see the debate roll on. Who will promote CDC for the whole of life – well they are likely to be unions and employers who know what adequacy is (but haven’t the money to give it with flexibility) and at the other end will be consultants and employers who pay enough and contribute enough into DC that flexibility is more important than pensions.

Where does this leave Nest and those like them?

My suspicion is that the best of DC will be achieved by the best DC schemes, those advised by the quality of consultants, Nest was advised by Hymans but £13bn of DC money is advised by Sam and I would be surprised if much of that money is going to pass into whole of life CDC!

The CDC solution was not right for Nest because they could not slam the door on flexibility and many other commercial trust based workplace schemes will go the same way.

Which is why I suspect that CDC will work best for employers who are prepared to maximise pensions and leave it for staff to opt-out of CDC if they want flexibility (with fair transfer values we hope).

There will be a small number of UMES whole of life schemes to begin with and none at all if one trade body has its way. But I hope that Royal Mail, CoE , TPT , Pensions Mutual and others will create sufficient momentum that both Sam and Steven Taylor can have a future at LCP and that in a year, we can, as Darren suggests, look back at the gestation of CDC with positivity.

Sam Cobley ended

“we don’t know how many whole of life CDC’s are being formed”

I will end with a hope that Pensions Mutual see

“quite a few whole of life CDC’s emerging, and the first rumblings of retirement CDC this time next year”.

 

 

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Coffee Morning – IHT on Pensions…REALLY!!!

Posted on March 14, 2026 by henry tapper
avatar Steven Goddard
CEO
Pension Playpen

Coffee Morning – IHT on Pensions…REALLY!!! CPD included

Type – Teams Online

When – Tuesday 17th March at 10:30am

You are cordially invited to attend our next Coffee Morning. At this event we are delighted that Mark Plewes from WBR Group will be presenting his thoughts on the change in IHT for the Pensions landscape.

He will give us his thinking of an overview of where things sit with the current IHT proposals on unused pensions passing through parliament and any lingering concerns that there might still be around implementation and issues. He will also want to touch on how the potential complexity of the plans might impact outcomes for beneficiaries and whether there is presently a risk of wider detriment and scam activity in terms of the confusion that such a change will cause.

Background:

In December 2025 the Government published the Finance Bill containing provisions to bring pension scheme death benefits within the scope of inheritance tax from 6 April 2027.  We look at what has changed since the legislation was originally published in draft, and consider what action SIPP and SSAS providers need to be taking now.

Agenda

  • What to do now?
  • How will pension planning change?
  • Occupational vs SIPP/SSAS?
  • What are the alternatives?
  • Will a new government U Turn this decision?

TO REGISTER

Please add to your calendar and click HERE on the day 

Mark Plewes is Head of Technical at WBR Group and recently appeared by invitation at the House of Lords to inform the  pensions finance bill debate.

Mark has been at WBR Group for over 3 years and prior to this role he was Senior Technical Specialist at Rowanmoor.

This should be a lively session with emotions running high!!.

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Utmost fined nearly £2m for its sins of the last 10 years.

Posted on March 14, 2026 by henry tapper

 

Angie Brooks is right to point out that governance matters and it matters for Utmost whether it happens to its UK bulk purchase business or its offshore investment bonds.

Utmost was the Equitable and is now owned by US Private Equity. Thanks to Angie for keeping us informed of happenings in Guernsey.

This is the same Utmost that has recently been bought by JAB, about which I have written here.

Utmost are still buying out British DB pension schemes sponsored by UK companies. These pensions are the heritage we have built over the past 50 years and I would, like Angie Brooks, ask why we are not asking questions about the provenance of Utmost.

More widely, I would ask pension scheme trustees to consider risk , not just from the existing sponsor’s potential failure but of the failure of the insurer.

A TAS 300 report on the risks of buy in/out against those of continuing on as a pension scheme , transferring to a pension superfund or transitioning to a new sponsor makes sense.

It has taken Guernsey Financial Services at least ten years to catch up with Utmost and the Isle of Man regulators still haven’t got there. How long should we assume all is right with Utmost and indeed all insurers. They may not all have the problems Utmost have with governance but Utmost is not the only insurer with links across the pond and in particular to Bermuda.

Home of Utmost

 

 

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A strange take away for a professional in Edinburgh last week

Posted on March 14, 2026 by henry tapper

If your journey to Edinburgh this week was to improve the lot of pensioners from pension investment, you may wonder about this take away.

I am surprised that a senior representative of professional trustee Zedra wants to display his “stash”. Is this improving his capacity to do his job? I leave it up to you to decide.

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Dirty tricks of some workplace pension schemes

Posted on March 14, 2026 by henry tapper

In a recent blog, I pointed to a report that Jonathan Stapleton brings to life with quotes from those working for the personal pensions on the wrong end of the transfer delays (who represent their customers as well).

There is a strong inertia in DC pensions that is created by those who hold the bulk of the money either in legacy personal and section 226 pensions (FCA regulated)  or by occupational pensions governed by trustees but controlled by administrators who are neither regulated by TPR or FCA.

The argument is simple, rather than adopt the kind of technology that allows money to move from one bank account to another, the holders of DC money have adopted “sludge practices” that leave consumers unable to get what they consider VFM. What is worse is that the VFM Framework will do little to help the consumer.

Here are takes  from Jonathan Stapleton’s article which goes into the remedies put forward from those quoted (the actual report is here)

It warned that, as the government prepares for the launch of the pensions dashboards, any increased visibility without a modern transfer system would only lead to mass consumer frustration.

And it said savers were currently “confined” by a 180-day statutory limit on transfers – a limit it said seemed “out of touch” with the rest of modern finance, where a bank account can be switched in seven days and a cash ISA transferred in fifteen.

The report also cited how so-called legacy providers use what it called “sludge practices” – such as requiring signatures on paper forms – to delay transfers. It said even more concerning was the “outright misuse” of anti-scam legislation, where it said firms trigger “amber flags” for schemes provided by prominent providers regulated by the Financial Conduct Authority (FCA).

The coalition of providers .. called on the government to adopt a series of reforms to the system.

Not every digital savvy provider has been a part of this report (I can think of Collegia and Penfold who are missing) but those who make it on the list are to be commended. Here are those who have put time and money into making this report which I urge you to read.

In particular, they called on the government to cut the transfer deadline to 30 working days and for the introduction of a “digital-first” presumption that makes manual paperwork the exception rather than the rule.

The report also recommended universal “due-diligence checklist” to ensure transparency over the reasons for blocking transfers, alongside a long-term pensions tax roadmap to avoid the speculation that precedes every Budget.

The call for action follows a consultation by the FCA, Adapting our requirements for a changing pensions market (CP25/39), which closed on 12 February.

Moneybox director of personal finance Brian Byrnes said:

“For too long, legacy providers have lagged in adopting innovations that improve saver engagement and outcomes. The FCA must look beyond headline statistics and examine why pension transfers so often stall. There are cases where providers flag ‘overseas investments’ while offering the same global tracker funds themselves, raising questions about whether these flags are being used to frustrate legitimate transfers and retain customer funds.”

PensionBee UK chief business officer Lisa Picardo added:

“Individuals carry the risk if their retirement savings fall short, so they should have real choice over how and where their money is invested. They must also be free to move providers easily, yet the transfer process still isn’t fit for purpose.”

People need pensions to be properly marketed – like this (anonymised)

AJ Bell director of public policy Tom Selby agreed:

“Government, regulators, and the pensions industry need to work together to tear down any existing barriers to support the government’s retail investing drive and turn Brits from savers into a nation of investors. Driving down transfers times across the market is essential, as is aligning the regulatory approach for retail and workplace pensions so we can deliver better outcomes for investors and support the UK’s retail investment ambitions.”

Hargreaves Lansdown Head of Retirement Analysis Helen Morrissey added:

“The pensions market is changing and personal pensions have a growing role to play, helping people take control of their savings, and understanding how to build for the retirement they want. Regulation should support this end with transfers taking days not weeks. The current pension transfer system is woefully out of step with wider financial services.”

Freetrade chief executive Viktor Nebehaj added:

“The current pension transfer system is not fit for purpose. At a time when consumers can switch bank accounts in days, it is unacceptable that pension transfers still have a six month deadline. Outdated, manual processes restrict choice, frustrate savers and risk undermining the benefits digital pension platforms can deliver. We need urgent reform to make pension transfers faster, simpler and fit for modern consumers.”

 

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Personal Pension providers opening doors for the unloved consumer

Posted on March 14, 2026 by henry tapper

I’ve been talking a lot about collective pensions to the point that you may think I’m disinterested in”pots” arising from DC pension saving. This is not the case.

This blog is about an excellent report produced by this group of DC consolidators that do it using  personal pensions. Here the investment can be done yourself (SIPP) or left to fund managers as simple personal pensions. Here is the list- delivered alphabetically.

congratulations to them for working together

Transfers are not restricted to “pots”. In years to come you’ll be able to transfer to CDC  as you can today with a  public  sector pension (including LGPS) ; with pension schemes you can swap DC pots for inflation linked pension.

But right now it is the retail personal pensions who are doing the heavy lifting for everybody else and having to do so because many of those providers not on this list are the cause of the trouble.

Here is the executive summary of the report…

If this is not important to the pensions industry, I do not understand . I have just returned from three days when pensions were discussed. Personal pensions were not discussed at any time, by anyone on the dance floor of its auditoriums.

Here is  the finishing paragraph of the executive summary. It is of course a two way transfer

The Pension Commission is looking into the fate of those mentioned above who have no occupational pension or even workplace saving for a pension. Those people include the self-employed and those who have left work for whatever reason (including health) who must make the best of what they’ve saved. They are being badly treated and here is the report for you to read here or download here

 

 

 

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