Tory pension bung for Clinicians

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Here is the statement from the Secretary of State for Health and Social Care – Matt Hancock.  

I have agreed to support this proposal from NHS England and NHS Improvement for reasons of urgent operational necessity.

The scheme involves employers making binding contractual commitments to be given to every affected NHS clinician so as to ensure that this commitment is honoured. Full details of the terms of the payment arrangements are set out in letters that are being sent to each affected clinician by their employer including the terms and conditions of the offer.

This contractual commitment contains the provision that in order for it to be operative, the affected clinician must make a Scheme Pays election in relation to the tax charge for 2019/20 only relating to accrual in the NHS Pension Scheme excluding 2019/20 additional voluntary contributions (AVCs) that is accepted by the NHS Business Service Authority.

These binding contractual commitments will provide for payment to be made when the clinician takes their pension, at which point the employer (or its successor) will be liable for the payment. NHS England has undertaken to provide funding to the employer (or its successor) in respect of those liabilities as the payments are made.

There are long-standing precedents for how the liabilities of NHS bodies are met and the government will act in accordance with these.

Should the NHS trust or foundation trust employing the clinician cease to exist, there are statutory provisions to ensure its liabilities, including commitments to staff, would be transferred to one or more existing NHS bodies, or the Secretary of State. The Secretary of State ultimately takes responsibility for the liabilities of NHS bodies including NHS England and NHS Improvement.

Legislative changes to NHS structures by successive governments have previously made provision for the liabilities of organisations that cease to exist to transfer to successor bodies or the Secretary of State. The commitment to make these payments will be contractually binding and if either (a) there is no employer or other NHS body to make this payment at the time the clinician retires or at any later time when a payment falls to be made, or (b) any NHS body to whom these liabilities are transferred does not have sufficient assets to make the payment, the Secretary of State undertakes responsibility for making the payment, or securing that it is made.

Therefore, these payments will be honoured even if the NHS body no longer exists in the future. In order to provide the same level of assurance to clinicians who are TUPE transferred outside the NHS, NHS England undertakes to ensure that the financial responsibility for meeting any employer’s liabilities in relation to this commitment is transferred or remains with an NHS body as part of a future transfer process.

Clinicians are therefore now immediately able to take on additional shifts or sessions without worrying about an annual allowance charge on their pensions.

Matt Hancock, Secretary of State for Health and Social Care


It’s good that clinicians (and doctors in future) will be able to earn without fear of penal pension taxation, but this is not a long-term fix to the problem. This blog has constantly complained about the repeated failure of Government to act on recent consultations on pension tax incentives. This crisis is a result of this failure.




Politically, we are now in a climate of “zero trust” and this statement, though made by an active secretary of state, is being classed as a political promise.

We cannot use tax-payers money to pay-off one group of voters at the expense of another. The doctors have a very real grievance (as this blog has promoted for some years). The timing of the first proposed solution to a problem we have known about since 2017 is less than a week away from an election.

Pensions last a lifetime and pension liabilities stretch indefinitely into the future. Responsible Governments legislate for permanence , not for votes.

The NHS pension scheme is unfunded and is paid by the tax-payer as we go; so you can insert “tax-payers” for “assets” – but you get the idea


If you would like to see details of the offer and the frequently asked questions on subjects such as AVCs, added years, scope and timeframes – read here

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We can aspire to better

Jo Cumbo points out that on Facebook, there is no burden of proof for advert claims. What we are being fed by politicians are various versions of truth that we have to “fact-check”, either using technology or our own experience.

The public has a right to be indignant, as we are indignant at racism at football grounds or when a young life is lost at London Bridge or Loughton.

We aspire to a better world than the world presented to us and we reject the behaviour of politicians, racist fans and the murderous.

It is in our power to rise above – which is what I heard Anthony Joshua do last night.


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It was a boring and a wonderful fight at the same time. It lifted boxing out of the puddle and returned it to its great tradition and I only use the word “boring” as the fight and the fighters avoided sensationalism and gave us a fight, a result and a champion that British people and boxing fans worldwide – can be proud of.

And – note this well politicians – Joshua’s victory was achieved not by belittling Andy Ruiz, but by elevating him. Ruiz may only have been champ for 6 months but he was heavyweight champion of the world and Joshua made sure that his opponent was remembered for what he’d achieved, not cast aside.

We can aspire to better

I have choices this morning, either to go to a Boris Johnson rally or to go to church. I am choosing to go to church, for there I will be uplifted, along with 500 others – in a communion for good.

The temptation to see the Prime Minister talk is tempting, it would be sensational but ultimately dis-satisfying. It is unedifying watching people lie, it is edifying being a part of a congregation praying for better.

We live in a naughty world

There is little good to be said about the conduct of this election. Perhaps America has found us a new lowest common denominator and we see the standards that have been adopted since Obama stepped down as the new normal.

But it was not always thus, nor does it need to be again. There is decency among politicians but not in politics.

The change we seek must come from the bottom up. It must come from people who want better – who want the behaviour of Joshua over Johnson. I want to see fans aspire to the beauty of United’s first thirty minutes against City yesterday and I’d like to see our nation coming together as our church comes together at 11 am every Sunday.

“How far that little candle throws its beams! So shines a good deed in a naughty world.”
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“There is no justice in Guernsey, but men protecting secrets”.

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Email from Niall Coburn to Guernsey Bailiff, in response to the Manita Khuller judgment:

Dear Bailiff Collas,

I write to you as former Head of Enforcement and regulator and lawyer who has worked internationally and attended the Trial of Manita Khuller vs FNB Trustees on the 18-21st of November.

As a Barrister of 30 years, I am totally ashamed at this unfair judgment which not only misrepresents the facts as disclosed in court  but actually failed to provide an analysis of the case competently as presented; where ample evidence was provided of FNB’s gross negligence . 

The court completely failed to identify that FNB appointed and retained an unlicensed and unqualified adviser (PPI Advisory) without the most basic of checks such as licensing and regulation.

This is despite the evidence presented in the form of letters, investor alerts and emails from the Thai Securities and Exchange Commission. 

FNB Trustees failed to respect Ms Khuller’s  investment risk profile and with a “quick glance” doomed her pension savings to known failures of a major fund such as LMMPF.

It was clearly shown during trial that the LMMPF was not only unregulated but also “unregistered” and this was in the Fund prospectus that FNB had from the outset. It‘s was not a case of “hindsight” at all.

Matching fund risks to those of the investor investment profile is the most basic of due diligence that FNB did not do, and this is gross negligence that was causative of the loss. These were not funds meant for retail investors, which Ms Khuller is.

The causation is clear from then onwards. 

The evidence displayed is  that FNB was grossly negligent as a regulated trustee and fiduciary and that you very well know but you chose to “protect your turf”.

This is a totally incompetent decision of the highest order and I know that you will all not sleep well in its delivery.

Clearly, you put the implications for Guernsey before Ms Khuller, who was wronged by FNB. 

There is no justice in Guernsey, but men protecting secrets. 

So what is this about?

In a blog last week, I wrote about the impending court case brought by Manita Khuller in the Guernsey Courts of Justice.

Manita lost her case . She is considering an appeal. The verdict is a personal tragedy for Manita , but it casts a long shadow over the role of Trustees in Guernsey and what Guernsey  means by Fiduciary Duties.Screenshot 2019-12-07 at 09.03.53.png

So what do we mean by Fiduciary Duties?

Australia has brought in their version of America’s “Fiduciary Rule” and introduced a “best interests duty”. One commentator explains that this falls into three parts.

“A duty to act in the client’s best interests, a duty to provide advice that is appropriate, and a duty to prioritise the client’s interests in the event of a conflict”.

There are similar principle-based rules in Canada – and here in the UK we have the FCA’s cover- all “treat the customer fairly“.

Guernsey has a “fiduciary standard“. Clearly that standard isn’t high enough.


Help for journalists

I know a lot of journalists read my blog and like to follow up.

For more information: Contact Manita Khuller on 077955 7067 or at

Related articles:

August 2018 Mail on Sunday article about Manita’s court battle:

Bailiwick Express article, August 2019:

Henry Tapper piece, November 2019:

International Adviser story, November:

Recent case in Cyprus where the courts also ruled against investors, stunning many observers, and causing many to suggest that the courts were worried about setting a costly precedent that could harm local financial institutions:

Bloomberg article about “going to court without a lawyer is new normal for U.S. litigants”

Talk of Guernsey plans for “new fiduciary handbook and revised pension rules”, suggesting awareness of need for improvements

Posted in advice gap, age wage, pensions | Tagged , , , , | 2 Comments

What I’d pay more taxes for.

This election has become about “Getting Brexit Done” and “Saving our NHS”. It could have been about so much more. We don’t live in a just society when we allow poverty of the type video’d here.

I came accross a thread on twitter curated by Lee Healey, I think Paul Lewis pointed to it. You can read the whole thread by clicking on the tweet below

Thank you Lee Healey for the clear thread and for the background reading which will take me a weekend to digest. I now know about Lee’s organisation Income Max (the kind of private organisation that the DWP and MAPS should be working with)

If you a place to start, follow Lee’s advice and read the 66 page report on the Benefit Cap and how it’s “working”, published by the Work and Pensions Select Committee in April 2019.

I would pay more taxes to see Lee’s work better promoted.

I’ve never had it so good

I pay taxes and I still live in a warm place with plenty of food and financial security for the future.

I would pay more taxes so that the people who live around my house and were last tonight on pavements and in St Luke’s churchyard, were given a fair deal.

I believe that in a digital society, it is possible to hypothecate taxes to certain social problems and invent systems that target money at specific problems. That is what I do at work and that is what I would expect the Department of Work (and Pensions) to do as well.

I do  not see the Benefits Cap as a way of targeting benefits at those who need them, nor do I see it as a way of getting people back to work, nor do I see it as a way of stopping scroungers. I know some scroungers and they have learned to adapt to the Cap – because scroungers – like scammers – are clever.

I would pay more taxes for the alleviation of poverty

I do not want to pay more taxes to provide bungs to all women born in the 1950s, whether they be rich or poor. I will pay more money where there is a clear injustice (and this may be the case – we await the Parliamentary Ombudsman’s verdict). I will pay more taxes if the compensation is targeted at the alleviation of poverty.

I claim pension tax relief at my highest marginal rate, this has recently been at 45% (though lower now). I do not need that incentive to save, I would gladly forego my incentive to save so that the 1.7 million who are missing out on a 25% contribution subsidy – promised them – get that subsidy.

The principle of progressive taxation – where those who have – subsidise those who have least – is one I subscribe to.

I would pay more national insurance – especially on my pension , if I knew that I and others were protected from financial ruin should I or my partner need long-term care.

I am keen to enter into a bargain on this. I pay the premiums in the way of national insurance today and I get the benefit – but only if I need it. I believe strongly in collective insurances – including collective pension schemes. I am prepared to take my chances on not living too long to collect on the insurance so long as I know the system pays to those who do.

I would pay more taxes for an NHS, free at the point of care.

Not only would I pay more, but I demand to pay more. I do not want to be under-taxed because of some misguided belief that increases in the cost of protecting the nation’s health can be capped. They cannot be. We are a society growing older, and – as I know – that means we demand more collectively of the NHS.

We use the taxation system to pay for the NHS as we go, we recognise that this will mean that we will have to pay more in tax to keep our health service coping and that if we cap this increase in spending, we are condemning ourselves to longer waits for treatment and less adequate treatment when we get it.

Who can deliver me more for my taxes?

I am not dogmatic about whether the services I , and others, need – is delivered directly by the state or indirectly through outsourced services.

The NHS is an obvious example , but a less obvious example, the pensions dashboard – shows just how much dogmatism is getting in the way of delivery.

Everyone agrees that we need a pensions dashboard. We spent 2017 arguing about proto-types and 2018 arguing about single or multiple dashboards and we’ve spent the whole of 2019 working out a delivery framework for governance and the dashboard itself.

If I had a placard , it would read


In the end, organisations like mine will deliver people dashboards, inefficiently and as a loss leader to other services, because we cannot tap into a centralised infrastructure that could and should have been delivered years ago.

When central Government, by which I mean DWP and it’s “arms length” delivery department the Money and Pensions Service, fail to deliver on my tax-spend, I am right to call this out. This is exactly what is happening at the moment and I resent paying my business taxes and my personal taxes to the DWP and MAPS so long as they trouser my money and fail to deliver.

I do not like paying taxes for failure, incompetence and the lack of accountability shown by the DWP and MAPS (in this specific example).

Why I’m happy to pay more taxes

I’m happy to pay more income tax, get less pensions tax relief and pay more national insurance to alleviate poverty, make pension saving universal, ease long-term care and help people take the right financial decisions in later life.

I don’t think I’m alone. So long as we can have a system that delivers tax revenues to the right people , in the right quantities at the right time, I will be happy with my spend and for that spend to be what’s needed.

I know no system is perfect and that there will be blockages and inefficiencies. So long as there are mechanisms to hold Government to account, like Lee’s Twitter thread or the W&P’s Benefit Cap report , I will go on writing about them.

I will be voting Liberal this year, not because they are any good at Pensions (they’re crap) , or because they will win (they won’t) but because it is the only mainstream party that has a shred of integrity left on the things I care about. I am beyond caring on Brexit, that bird has flown.

I want to pay more taxes to put this country right and I want to do it in a sensible undogmatic way .

Posted in advice gap, age wage, pensions | Tagged , , , , | 4 Comments

Dorset Healthcare – getting a county “retirement ready”.

I’m not a great awards lover but I loved giving an award to the Dorset Healthcare University Foundation Trust last night


I spent a weekend a couple of months back wading through a pile of submissions from organisations wishing to win a Reward award.

Only one organisation stood out as world-class and it was Dorset Healthcare.

When I was asked to present an award at the dinner held last night, I found to my delight, it was the “Retire ready” award and the winner was Dorset Healthcare.

I am so pleased that these great people, who have spent 2019 improving health and financial wellbeing in Dorset and – in particular in the Dorset NHS gained recognition last night.

I will be posting more on their work and how it can be an example to us all over the next few weeks, but for now – many congratulations to them for both their awards last night!

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Can we really afford to retire?

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Gavin and Louise looking at holidays

That’s the question Michael Buerk has been asking those tuning into the second episode of Channel 5’s documentary on our retirement planning.

1.5m of us are working beyond the retirement age with 90% reliant on state benefits alone. One in five of us have no pension at all.

Gavin and Louise have no plans to be working beyond 60. Gavin would like to retire at 55 having been in the army since 1989. This would mean them retiring together.

They are “seizing the day” but they haven’t ever sat down to work out what their dream would cost.

Louise has £22,000 in a pension pot and a buy-to-let income of £400 pm. Gavin has a military pension of £12,000 a year and a lump sum to come.

They are hoping to spend 3 months a year travelling abroad. Having been taken to the travel agent it turns out one holiday in a lifetime in New Zealand would cost them £15,000. They want to spend £10,000 pa but their pension planning tells them their combined holiday budget would be £2,500 – one dream holiday every six years.

You can’t buy a sausage with a brick (the rent trap)

Nearly 4 million Brits plan to sell their properties to fund their retirement. But they will still need to find somewhere to live.

Denni and Graham moved into rented accommodation , having sold their property to buy a salon. They are trapped in the “rent-trap” meaning they are working for their landlord, not their retirement.

Renters are stuck paying more for their rent on falling (real) incomes. The number of older people in the private rented sector has doubled in the last ten years and the vast majority of them are people on low incomes renting in the private sector.

“Once the kids leave home”

For retiring sergeant- major Gavin White, what’s critical is getting another job when he leaves the army or face a drop in income of £17,500.

Far from retiring when the kids leave home, he is looking at living on subsistence levels – not exploring the joys of the new found freedom .

For Gavin and Louise to retire at 55 and 60 , they could also consider down-sizing.

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Felicity explains it how it is

At least Gavin and Louise have the option to compromise on the dream.

Juggling as a single parent

Single mother 44 Clare Craig splits her time three ways. There’s no money to save for a pension , no money for a holiday and she can’t see beyond the life she’s not properly living on now.

Two thirds of the people who rely on the state pension in retirement are women and most are single.

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Clare has no option to save

The retirement outcomes of single parents are half the comparables of those who spent an equivalent time in a stable relationship.

Can you afford your retirement- now?

Just over half a million of us are approaching their retirement age this year.

Ivor is one such fellow, at 59 he is still working the clubs on ever diminishing earnings. He’s washed-out by his own admission – what can he do but retire? But he’s too scared to do anything else , because he has nothing to fall back on.

For Gavin White, the option of earning after he leaves the army is now the only option if his and Louise’s comfortable retirement is to happen. Hostile environments not luxury holidays – it’s not what they wanted.

Carol May is a 64 year old cookery teacher who has worked out that there won’t be a time when she won’t go to work. Nowadays she works three days a week which exhausts her- she’s a Waspi Woman.

With 40 years national insurance behind her, she only have a roof over her head thanks to charity. She relies on food-banks.

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Carol is back at work at 64

The problem is partiularly acute to women like Carol – relying on benefits and low-paid work. It’s harder to find and keep a good job as they grow older


Big ideas – need big plans

Felicity Hannah points out that for people like Gavin and Louise, it’s not enough to just save for retirement, they need to plan for their retirement.

They don’t just need a pension pot – but a retirement plan – in financial terms an AgeWage.

Gavin and Louise have used the program to create a ten year plan which involves working longer and saving in a purposeful way so retirement expectations are met.

The grim message of the program was that Gavin and Louise appeared to be the only couple over two episodes who had done just this.

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A crisis created by a lack of planning?

So was this two part documentary worth it?

There’s a lot of talk on social media about it focussing on doom and gloom. But in the gloom the gold gathers the light about it.

I found the program has given me a kick up the backside to get back to what I should be doing – “converting pension pots into retirement plans”. So I’ll give the last word to Felicity Hannah

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Payroll does pensions heavy lifting. #payrollAU19

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“Pension experts have expressed concern that people missing out may blame automatic enrolment”

I’ll be spending today at the Reward Strategy Payroll Autumn Update and tonight at the “Rewards”, where I’ll be dishing out a gong to someone great and good.

Steve Webb’s doing the payroll keynote at 10 am and I hope he acknowledges the part payroll has to play in Britain’s great pension policy success story.

But the day is packed with the information that payroll treats as business as usual but pension people know little about.

Occasionally , our worlds come together – the net pay scandal is one of them. I’m very proud that I could co-feature in  this article with the CIPP’s Helen Hargreaves and that it’s published in Reward Strategy today,

The Net Pay Action Group (NPAG) calculate that this group contains around 1.7m people who have been missing out on pension benefits because of a loophole affecting people with net pay pension schemes. A future Conservative government would conduct a comprehensive review to fix the issue.


The problem has arisen because the automatic enrolment (AE) earnings threshold has remained at £10,0000, but the income tax threshold has nearly doubled since the start of AE to £12,500. NPAG reckons that AE accounts for the majority of people missing out.


Many pension experts, including Adrian Boulding, director of policy at NOW: Pensions, have expressed concern that when people find out they have been missing out they will blame AE – souring what is generally considered a government success story.


The problem may be bigger than the Conservatives reckon. Helen Hargreaves, associate director of policy, at the CIPP said that you can earn a lot less than £10,000 and still be caught in the loophole.


She added:

“Many low earners get enrolled when one period’s earnings spike above the pro-rated threshold. Once in, they stay in, little knowing they could be paying 25 percent more for their pension contributions than the same worker in the office next door”.


Not all workplace pension schemes work the same. Net pay schemes only pay tax incentives to the taxed, while relief at source schemes pay incentives to everyone. NEST pays incentives to everyone, Smart and NOW only to the taxed while People’s swings both ways.


Generally insurance companies pay incentives to everyone but there are exceptions, Legal & General offer two master trusts which use different ways of granting tax relief and incentives. On the other hand, traditional occupational schemes – including all government schemes, use net pay.


“NPAG welcomes the government focussing on this problem, a group of us led by Baroness Altmann – including the CIPP and several pension providers – have been lobbying the Treasury and Department for Work and Pensions for action on this and we’ve been rattling the cages of all the political parties. It’s great that after four years of trying, one has finally pledged to do something about it”.


Hargreaves was confident the problem could be fixed, quickly and easily. She said:

“We’ve been working with the Low Income Tax Reform Group and taken our work to the Office of Tax Simplification. Government has conceded that a P800 solution that rebates unpaid incentives to those impacted after a year-end sweep, could be coded and integrated into HMRC’s systems at am estimated cost of £10m. This seems a small price to pay for fixing a big issue”


While the size of any incentives would be unlikely to exceed £65 in any year, the numbers of people not getting what they were promised was increasing each year the AE earnings threshold stayed level and the income tax threshold went up.


The government has a chance of nipping this problem in the bud, but the intervention couldn’t have come a moment too soon, each month that goes by is making the problems caused by the net-pay anomaly – a little worse.

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“Britain’s great pension crisis” – beware or despair?

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Going out after the watershed, Channel 5’s two part exploration of how fit we are to retire, sits awkwardly between the Yorkshire Vet and Chris Tarrant’s Extreme Railways, not the kind of TV you’d watch unless you’re into Michael Buerk and Felicity Hannah.

I’m a fan of episode one and , though I’m crusty enough to have difficulty with catch-up, I’ll be watching episode two when I get in from the Rewards awards tonight

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Last night we saw Aron Ling and Rachael Newton  sandwiched between Michael and Felicity work out that they haven’t saved enough to realise their dream of a gite in France and were on course for two weeks in a caravan overlooking the north sea.

They also found they would need to hand back two thirds of their week Lidl run , were they living on their post retirement AgeWage.

And they discovered that their posh steak supper at the local bistro would be downgraded to an open fish and chip supper.

All of which made them think, and it made me think too, as this couple were old enough to know better and clearly didn’t. He’s a fireman who in the public service would be looking forward to a proper pension , but he works for Norwich airport and has £60,000 in a Scottish Widows workplace pension.

A crisis of expectation

This wasn’t a program about investments or dashboards or guarantees or anything else of the paraphernalia we call “the pension industry”, it was about money saved and money to be spent.

Put simply, the couple thought they were doing ok with £60,000 put away and Felicity kept delivering envelopes that told them otherwise. Here were two working people with a reasonably affluent lifestyle and a house worth £180,000 who had a “pot but no plan”.

There wasn’t a financial planner in sight, but as Felicity kept banging on that financial planning was what this couple needed. There but for the grace of God go I and I bet a high proportion of those who stayed tuned in after the Yorkshire Vet were making some mental calculations about whether they were any different.

The harsh reality of this program was not sensational, it was horribly familiar. People are enjoying the fruits of today and complaining they cannot give up their current lifestyle for the fruits of tomorrow.

And it didn’t stop with lifestyle , one of the stories was a lot darker



A problem easier to illustrate than solve

We know from the election just how expensive it is to put pensions right on a national basis. The cost of restituting a part of the “stolen” WASPI pension is estimated at £58,000,000,000. The DWP estimate the cost of full restitution to be three times that. The cost of meeting the expectations of everyone like  Aron and Rachael could run into trillions (there are two hundred £50 billions in a trillion).

That’s how short we are of meeting our collective expectation of an age in later age. It will take a massive lifestyle shift akin to giving up smoking and drinking to adjust to a world where we are effectively saving for the retirement we dream of. While this blog focusses on the minutiae, (scam-avoidance, ending rip-off charges  and providing people with proper income choices in later life) , the big picture was on Channel 5 last night. It didn’t make for comfortable viewing for Nic

And the program didn’t stop at confronting people’s unreasonable post-retirement expectations. The sections that looked at the cost of care focussed on the post-retirement finances on a lucid lady who was losing both the love of her life and her life savings.

More questions than answers and Joe – the optimist was frustrated by the lack of magic money trees. Is it any wonder that successive Governments have been kicking these cans down the road? We can barely afford the front-line NHS, we are nowhere near affording to meet the 400 pensioners a week who sell their houses to meet their later life care costs. Opinion on social media (among my lot) was divided – but more positive than negative



The obligatory scandal slot.

Pension programs cannot get by without talking about the perils of investment and this one was no different. A couple of retired civil servants had placed the proceeds of their savings with a Forex specialist who had gone bust and now owed them their dream home in the south of Europe. They had tried to hedge their currency exposure with the wrong people and the story told us about the vulnerability we all have in the strait of Hormuz. Our tankers are laden with oil and there are pirates about. There should be protection but there not always is. My friend Joe got hot extremely hot under the collar about this,

The program walked the fine line between fear and hope, need and greed. I thought it walked the line.


Beware or despair?

As with so many crisis – including our nearest and dearest BREXIT, the impending catastrophe rarely turns out to be quite as bad as we thought and it is usually averted by pre-planning. The ads to the program included a cheery salesman from an equity release broker telling us that we could buy our sausages with bricks. On a day when M&G closed its mega-property fund for lack of liquidity, I was a little sceptical

There was a section of the program when Aron and Rachael discussed their business planning for later life. It was clear they were simply unaware of what the future held. This program stress-tested their dreams and found them falling well short of the £250,000 minimum savings threshold they’d need to stop working.

The truth is in short supply but there was plenty of it in this program.

The big question is whether this truth makes us aware – or despair.

Posted in advice gap, age wage, pensions | Tagged , , , , , , | 3 Comments

Are women saving as they’d want?



I’m in the unusual position of being in a long term partnership with a lady who earns more than me and knows a lot more about pensions than I do.

I wish it wasn’t so unusual but the sad fact is that there is a wide pensioner pay gap , just as there is a gap in earned income between men and women. For most households, women are likely to have the weaker finances.

By the time a woman is aged 65 to 69, her average pension wealth is £35,700, roughly a fifth of that of a man her age, according to a study at the end of 2018 conducted by the Chartered Institute of Insurance (CII).

Emma Maslin is a money coach asks an important questions on her blog

After having children, I had a career break. When I returned to work, for childcare reasons, I took a different role with a significantly lower salary. Then I worked part-time, with an even lower salary.

Finding myself in an unsatisfying role for which I was overqualified, I started my own business. This gave me back a sense of purpose, but took away access to an employer pension scheme with its top-up contributions.

The motherhood penalty, the flexible working sacrifice and the pitfalls of opting for a self-employed life — my pension pot has been hit by them all. How about yours, or those of the women in your life?

What worries me is that many  women I know are financially ill-prepared for retirement and feel guilty that they have let themselves or – worse – their families down.

They pay the motherhood penalty twice- firstly by losing out on personal security and secondly by societal pressure which suggests they have been financially feckless.

The situation women find themselves with regards saving are mirrored by state pension entitlements. Reforms to state pension entitlement should over the long term largely remove the state pension as a source of future inequality but in the short-term, as the WASPI women point out, women’s finances will get worse before they get better.

So what can women do for themselves?

Women do not earn considerably less than men until they reach Mum’s age

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It’s clear from this chart that women are in the strongest position to save for themselves when they are young and that as they move into their forties, both their earnings and spending power decreases dramatically.

And – due to the power of compounding interest an average earner in a good-quality defined contribution pension scheme could miss out on £100,000 in employer contributions and tax relief by leaving pension saving until they’re 40 (source Barnett Waddingham actuaries).

Put simply , the savings women make when they are younger are the ones that count most when they retire.

Many younger women I talk with are both ready to save and happy to save for their futures but lack motivation to do so as they prefer investments which they can control and have obvious positive social impact.

Historically, the assumption has been that an investment for social good won’t perform as well as one that invests with little regards to Environmental, Social and Governance considerations.

This assumption is being smashed by recent reality. The market no longer favours “sinful stocks” and is increasingly investing in the equity and debt of organisations with a low carbon footprint, strong social purpose and responsible governance.

What is more, it is now possible to invest in funds which are specifically targeting investments that  score strongly on ESG. Technology is increasingly allowing women to see through the fund wrapper and look at the underlying investments in the funds they invest in.

The weight of money flowing towards these funds is creating momentum in their favour and many of these transparently run ESG funds are out-performing more traditionally invested counter parts.

These funds are now readily available in most workplace pensions that women can invest into. We expect shortly to see them as the “standard” fund into which you are invested if you do not make a choice.

These standard funds (often known-unfortunately- as “default” funds) are expected to be selected to meet the needs of investors and increasingly research is suggesting that investors, especially younger women are demanding their money is invested responsibly.

So what am I , a 58 year old man, telling my young female friends?

Firstly, all women, but especially younger women , should stay in the workplace pension schemes into which you are enrolled

Secondly, if you are like Emma Maslin you start your own business or choose to be self-employed, you may find yourself without a workplace pension. If this is the case you should consider setting up a pension with the Government pension scheme called NEST.  This is an option for all businesses and the self-employed.

Thirdly , you should consider making extra contributions into your pension scheme. If you are in a relationship you should discuss with your partner, the importance for you of building up financial security and insist on your right to do so. For too long, young women have been told they will be looked after- too often they aren’t.

Finally, if you are one of the young women I have been meeting, then you should be investigating the ESG friendly investment options offered by your workplace pension.

Fortunately, the senior positions in reward, human resources and (for the larger employers) pension departments are likely to be on your side. “Engagement” is the buzzword and asking those who run your workplace pensions for information should be met with happy smiles!

If you cannot get help from your employer, you should get help from the helpdesk of the workplace pension provider your employer has contracted with . For those without a workplace pension, large schemes like NEST are well resourced to answer your questions,

As a final point, it’s worth thinking about the pension package when you change jobs. The current minimum pension contributions from employers under auto-enrolment are none too generous. Make sure that if you are negotiating your pay , that you include pensions in your package.

Look out for yourselves – you cannot rely on anyone else to do that for you.






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Regulation 2.0 (and how to pay for it).


I am on something called the Pension Regulator’s Stakeholder group which means I’m supposed to champion tPR .I get meetings with MAPS (which always get cancelled at short notice) because I represent something out there called “innovation”.

But in truth I am no champion of tPR and think MAPS as innovative as a plastic bag polluting the beach.

If Government wants its “arms length bodies” to get properly funded, those bodies had better show themselves worth funding first by publishing a clear business plan into which the private sector can choose to invest (or not).

The DWP has just completed a consultation on how its arms length bodies, tPR, the Pensions Ombudsman and MAPS are funded (the general levy)

The problem is that these arms length bodies have decided to become a whole lot more expensive.

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Nobody has put forward a good argument for why we should throw a whole load more money at this problem , the solution is – it appears – to find the best way to transfer money from member’s pots to civil servants’ pockets.

The stock response from Government is that the “pensions world has changed”, but the link between increased expenditure and change is not clear. At least in the case of MAPS, there is no business plan to back up the assertion that more money is needed.

I’m grateful to Ian Neale and Aries Insight for pointing out

When the “Single Financial Guidance Body” was announced nearly three years ago, the Government declared that it expected levies overall would not increase – and might even decrease “as the efficiencies generated from merging the three current services into a SFGB begin to materialise”.

Ian  thought then that this was optimistic and predicted steadily increasing levies. The Government stated then it had no plans to widen the funding base.

The government proposed four options to increase the levy, favouring an option, which would see a rise of 10 per cent in 2019-20 rates on April 1 2020, with further increases from April 2021 “informed” by a wider review of the fee.

Other options included a phased increase over three years of 45, 125 and 245 per cent, respectively, or over 10 years starting in 2020 or 2021.

These staggering increases will be born on a headcount basis, meaning that rich schemes like USS with high per member funding will pay little , while schemes like Smart, People’s, NOW and NEST will be landed with huge levies based on huge membership but with precious little in assets over which to recharge the extra costs.

Put in terms which ordinary people will understand, those who have least will pay most, while the schemes that have most will pay least.

That is not a recipe for fairness. Since MAPS, the biggest drain on the levy has failed to publish its magnum opus for 2019 – its business plan, I am siding with the big master trusts in their very real objections to paying more for something that is delivering less.

Conspicuous failure at MAPS

I won’t comment on the Pensions Ombudsman as I have too little to do with it , to make any kind of judgement.

As regards tPR, it has had some success, the master trust authorisation process went well and it continues to bask in the glory of auto-enrolment implementation (which it did well). It has adopted a pragmatic approach to DB regulation which looks strategically sound, forcing small schemes into a one size fits all strategy (unless they pay to be different) and focussing on managing the risks of large scheme failure. However tPR is inefficient in its work, lacking in outside accountability and anything but transparant in its publication of impacts and forecasts.

But it is MAPS that should worry the DWP and all in pensions. It is the amalgamation of TPAS, MAS and the various bits of Pensions Wise which fell outside these two. It is currently leaderless , having lost its CEO a few months into the job. It has failed to deliver the one thing it promised to deliver – a business plan. It is haemorrhaging staff and the quality of its delivery on pensions (since the departure of Michelle Cracknell) has fallen off a cliff.

“MAPS has a death-wish” as one former DWP minister told me. It is asking to be funded by the pension poor but it is doing little for the pensions poor except spend their money.

My advice to DWP

I will be watching Britain’s Great Pension Crisis with Michael Buerk and Felicity Hannah which airs Wednesday December 4 and 5 at 9:15pm on Channel 5.

My advice to DWP is that it does the same and that while watching, it asks whether it is really doing what it can to help those most in need.

We have a half-built system of universal benefits that needs every penny it can get. We have crazy plans to spend every penny (we don’t have) righting the wrongs of pension miscommunication in the past. And we are considering denuding the pension pots of the poor to pay for arms length bodies who are simply not worth the money.

Darren Philp of Smart  speaks better than I can, as he is policy Director at Smart and at the coal face.

“While we understand the need for levy financing to meet expenditure in the short and long term, we cannot support the proposals outlined in this consultation paper, which present knee-jerk solutions to a long-term and structural financing problem with the general levy.”

Gregg McClymont of Peoples speaks to the same point.

“The per member structure made sense in a world of long-term employment, where a smaller proportion of the workforce had access to workplace pension saving. But auto-enrolment is a small pot-creation machine, because it’s, rightfully, brought in a new group of people with lower earnings who move from job to job much more frequently.

“It’s completely unfair that these savers carry the heaviest regulatory burden, with master trusts paying the highest cost.”

These quotes are taken from an excellent article by Maria Espadinha of Pensions Week which you can read here


Posted in advice gap, age wage, pensions | Tagged , , , | 2 Comments