Pensions drawdown in a time of stagflation? We need a pensioners club!

Posted on April 17, 2026 by henry tapper

It got me going – what with being 64 and having a couple of DC pots I’d like to turn to pension! Thanks to Jonathan Guthrie , here’s the link to the story.

Can anyone stand stagflation on their own?

We’ve all heard of the magic drawdown number 4! Jonathan remind us ..

In the UK, four is .. the magic digit for anxious retirees who are starting to liquidate investments to live on. It is enshrined in the 4 Per Cent Rule, a popular guideline for financial planning. This faces a tough test if economic conditions deteriorate into extended stagflation amid oil price shocks.

I’d add he’s talking to a readership who are pretty sophisticated. 4% may seem a little stingy when you can get 7% on a level annuity if you’re in your 60s, even if you’re in good health! But Jonathan’s thinking of an income that keeps pace with inflation.

Easy-peasy for smart FT readers

The 4 Per Cent Rule, devised by US financial adviser William Bengen in 1994, provides an apparently easy solution to that puzzle: draw down 4 per cent of your fund in the first year of retirement. In each subsequent year, adjust the prior year’s withdrawal by inflation and take out that amount. You should be safely on track for the next 30 years, supposedly.

Ah but “supposedly” is a weasel word in Bracken House – home of retiring journalists!

…my journalist’s natural distrust of everyone and everything kicked in. How well does the 4 Per Cent Rule stand up to stress testing? In particular, what results does it produce during a period of stagflation, defined by sluggish growth, market volatility and sharp falls in the spending power of money?

The article takes you through a series of charts that leads you to the thought that if you had high inflation and low or negative growth on your drawdown pot you’d find yourself pretty soon like the man at the well , with a big bucket but very little water to draw on

I know you want the charts and not the cheesy picture so , as you’ve got this far , here is a free share link to read Jonathan’s article! 

He ends by warning us against simple solutions

The problem with the 4 Per Cent Rule in unqualified form is that it can “oversimplify what is one of the most complex financial decisions people will ever make,” warns Ed Monk of Fidelity International, the investments group. “

The original rule was based on historic [US] market data and the idea of a 30-year retirement,”

he adds.

“Neither assumption reflects the outlook for many of today’s retirees.”

Blind faith in a magic number is fine if you are having a flutter … in decumulation, it is best to stay flexible.

My Endgame!

I think that FT readers may fancy staying flexible and having a retirement pot to draw from like water from the well. They probably have the tools to measure how much water is left down at the bottom and manage their affairs like a prudent farmer.

But for most of us (and I include myself) the prospect of managing my deferred pay when I’m in later life is not a prospect that make retirement sounding too relaxing!

So, with best will to the FT’s smartest readers, I’m looking for a way to get paid a proper wage when I stop drawing income from my job!

The pensioners club

Regular readers will know what I mean, and if you’re not – let me introduce you to three letters that bring Jonathan to a club with others in his position (I am one). The club is called “collective DC” and it allows us to pool our pots in a massive well from constantly replenished by flows from others pots and from their salaries (we say “pension contributions”).

Pensioners Clubs are for ordinary people. Pensioners clubs give financial advice to those younger than themselves – this financial advice is free.

They have a point

Such a club to pay pensions from workplace savings sounded fanciful till Royal Mail set up a club for 120,000 staff.  It’s working very well for them. No postie needs to worry about the 4% rule!

 

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I took her CDC baited hook and was landed by Jo Cumbo!

Posted on April 17, 2026 by henry tapper

Following this year’s  Pensions UK investment conference I was told that my press badge would not be renewed. I was not a journalist and I spent too much time expounding my commercial views and not enough the views of other. I agree that I am not opinionated and if I’m let into Pensions UK conferences, so should half the people who dominate social media!

But social media is a place where journalists hang out and read my pieces and it is always good to see your articles appearing in the trade press and sometimes the wider press, even if I’m not good enough to make it to the lofty pages of what is largely a right wing press.

A fishy tale of a salesman and and an angling journalist!

The FT is a paper that I have a lot of time for and I interact with some of their journalists. I admire many of them and can say that though I don’t always agree with her, I am more inspired by Josephine Cumbo than any of the other  social media heroes who I quote on this blog. This is a long intro to a conversation I had yesterday afternoon with Jo which started in the morass of the mandate debate and ended with a pleasant one on one conversation which may go somewhere. Jo is instrumental in the strategy the FT adopts to help their staff afford to retire.

Here’s what I picked up after lunch from Jo.

There were even then a lot of faces such as Rob Reid’s liking the comment and for good reason,  that last sentence could and should be used in conversation and formal speeches.

I couldn’t resist reminding people that I fervently believe that adopting CDC pensions rather than persisting with pots and DC, is equivalent to giving you a pay rise in retirement of up to 60%. We can’t do this ourselves (yet) but we can get out employer to make a CDC pension available.

I had recently read an article by Jonathan Guthrie who complained how hard it was for him to convert his pot into a retirement income using the 4%  rule for drawdown. My actuarial friend Chris Bunford tells me that a half of the pot should be devoted to increasing the drawdown year on year to keep the regular income real. More on this in a moment, as I was thinking this, Jo was continuing the conversation

There is not enough information out and about with regards CDC. Recently I have started calling the type I think we need “workplace CDC” as opposed to “retirement CDC” which is about DC accumulation in a pot and a CDC pension as an alternative to an annuity today or in the future (flex and fix). I wasn’t going to let this opportunity to clear some myths up and dived into the pool to save the conversation from drowning!

 

Ok , this is why I’ve been thrown out the press room at Pensions UK conferences, I can’t stop selling my ideas, I can’t stop it – I was born a salesman!

I am also someone who took his little bit of DB early so I could live off it when founding AgeWage (I have never taken much salary since leaving my proper job 6 years ago!)

Jo threw me some bate and like a dumb fish I rose to the surface to take it

And now she had me on her hook and started hauling me in – her net set like the journalistic angler she is.

Of course I have an app in wait to launch as soon as Pensions Mutual’s CDC is authorised and it’s being developed to answer questions like Jo’s

 

Which takes me back to  comparing SMPI apples with CDC pension pears. People so cling to the triple lock when it comes to increases in state pension but are happy to be quoted annuities and DC projections based on level pensions.

The increases are half the value of the CDC pension and we shouldn’t just be comparing the pension at outset, we should be considering the relative pensions at 75 and 85 and 95 (let’s hope we live that long!).

The regular income from default retirement incomes will needs be comparable  and that doesn’t mean comparing level income (SMPI and ERI) with real pension where the income goes up each year in line with inflation (CPI).

Now here’s a pension story for a good journalist, not one confined to the blog of a salesman!

 

 

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Surpluses will make “employers see DB schemes as long-term assets”

Posted on April 16, 2026 by henry tapper

It’s good to see a volte-face from a firm of consultants that has been rock-hard supporters of buy-in and buy out since schemes swung back from deficit and into buy-out territory.

But this Bill has been on their desks these last 9 months and surpluses have been with their DB clients considerably longer. So why this lecture this week? Let’s repeat that headline!

Here is the article! David Brooks is a good man

As the bill returns to the Commons today (15 April), continuing the legislative process, Broadstone head of policy David Brooks suggested the inclusion of surplus refund provisions in the bill

“should be understood first and foremost as an attempt to reset how employers view DB pension schemes”.

Last year, the government said it would enable well-funded DB schemes to pay surplus funds directly to scheme members over the normal minimum pension age where scheme rules and trustees permit it, from April 2027.

Brooks noted, at its core,

“this is about encouraging sponsors to see DB schemes as long-term assets rather than stranded liabilities, and to have the confidence to support them on that basis”.

He added:
“By reducing the perceived ‘dead end’ risk of surplus capital, the government is creating space for schemes to invest more productively, including through long-term UK assets that support growth and economic resilience. That strategic objective matters far more than the question of whether surplus refunds are ever actually taken.”

Brooks continued:

“There are, of course, ancillary benefits. Schemes that are better funded and more comfortable running on are more likely to grant discretionary increases in members’ favour and to make trustee decisions that improve member outcomes. Equally, keeping schemes open to a wider range of assets reduces the pressure for consolidation preserving trustee control.

“But those outcomes are consequences, not the primary goal. The real prize is changing behaviour: giving employers a reason to stay engaged with their schemes, back long-term investment, and treat DB pensions as part of the solution rather than a problem to be offloaded.”

 

Welcome to the party David Brooks, it is good that Broadstone that looks after so many small schemes is moving on from insured buy-out as the Golden Standard.

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Mercer appoint a leader of CDC ; not before time but very welcome!

Posted on April 16, 2026 by henry tapper

I never thought I’d see the day that Mercer embraced CDC – hurrah!

I am happy to say that Ruari has long been a member of our pension group and makes an excellent leader of UK CDC for Mercer.

The shift in the market sentiment within our bubble is astounding, CDC is being regarded as part of our future. But while large consultants are one thing, quite another is the view of the wider market of employers and ordinary people.

Change will be driven by  Unions reminding employers they can give staff up to 60% more pension at no cost; – using CDC workplace pensions.

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“Mandation speech” draws two men and a dog; the Pension Schemes Bill proceeds.

Posted on April 16, 2026 by henry tapper

 

To a not very crowded chamber, the shadow secretary of state for Work and Pensiosn did her party piece again

“It’s hard to find anyone who supports mandation”

I told Helen Whately when she spoke at Pensions UK that we do not all agree that a mandation backstop shouldn’t be in place. What is needed is a Pension Schemes Bill that delivers pensions to people who currently just get pots , superfunds to allow small DB pensions to run on and powers for trustees and employers to use surpluses responsibly (that includes paying unpaid increases on pensions).

I don’t think I’m very popular at Pensions UK or the ABI or with the long list of think tanks or Tom McPhail (who gets a special mention for his position on mandation).

There were three MPs on the Labour benches and a few more on the Tory benches. There is a dog asleep (and acting as a foot rest) . The empty Lower House suggests that the Lords and the Conservatives are equally irrelevant on “matters of principle” and over-complication of fiduciary duty.

The few Conservative MPs behind Helen Whately seemed unenthused. They were about to be brushed aside

Here is what the amendments brought to the table..

The full debate is a little more pertinent

If you want to read the full debate including the statements made by Torsten Bell, proposing the Bill on behalf of the Government they can do so here.

What is being discussed is very important and  the Pension Schemes Bill is not about mandation , however much the pension industry is using it to derail the smooth passing of the Bill to Act.

I would remind my readers that hardly anyone in the House of Commons considered the speech of Helen Whately worth turning up for and I suspect the attitude of ordinary people.

Here is Bell on mandation

I now turn to the Bill’s reserve power on asset allocation, a power that has one purpose, which is to support better outcomes for savers, and one use case, which is to underpin the industry’s collective view that delivering those better outcomes for savers over time is supported by a more diverse asset allocation. [Interruption.] Let me spell this out a bit more, as I am being encouraged to do by the hon. Member for North Bedfordshire (Richard Fuller). There is strong evidence, not least internationally, that pension savers’ interests lie in greater investment diversification than we currently see in the UK defined contribution market. That is why 17 of the UK’s largest providers designed and signed the Mansion House accord, committing to invest at least 10% of their default funds in private markets by 2030. Those schemes are not just talking; they are acting, building up the capacity to invest in a wider range of assets.

However, while the industry is making progress, it has also spelled out a well-recognised collective action problem: an industry dynamic that sees competitive pressure to win and retain employers driving a narrow focus on keeping headline costs as low as possible, not on what matters to employees—the net returns on their savings—which is what we all want schemes to focus on. This risks a pension provider that is building the diverse

investment capability to deliver returns for savers being undercut by a competitor making a virtue of not doing so, even though it knows that that is not in the best interests of savers. The industry itself raises this issue; it is not an abstract risk, because it has already happened.

Under the previous Government, the Mansion House compact saw a narrower agreement on the importance of private markets signed. It was signed, but it was not delivered. Given that we all agree that it would have been good, why was it not delivered? The industry has now published its own progress update spelling out why. The single biggest barrier to delivering on its commitment was, in its words, that

“market dynamics continue to focus on minimising cost instead of maximising long-term value”,

and without intervention to shift that culture,

“‘too much focus on cost’ remains the key barrier.”

That is the collective action problem in a nutshell, and solving it—giving the industry certainty that it can do what is in savers’ interests, because the rest of the market will move too—is the only purpose of the reserve power. That is why we cannot support the Lords amendments that seek to remove it. To do so would be to let savers down, to ignore the strong consensus about what is in savers’ interests and to disregard the barriers that we all know are holding back delivery on that consensus—a view spelled out by the previous Conservative Chancellor, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt).

I have been clear that that is the only reason the reserve power exists. To reinforce that point, our amendments in lieu today spell out that the power can be used only to support the industry’s view of what is in savers’ interests, as laid out in the Mansion House accord. The majority of savers’ contributions are held by schemes that have signed up to that accord.

and again

We are going to set this out in two ways. First, we will specify on the face of the Bill that regulations under the reserve power cannot require more than 10% of assets to be held in qualifying assets overall or more than 5% in the UK—exactly matching the Mansion House commitments. Secondly, our amendments require any regulations to implement the reserve power to be entirely neutral between asset classes, spelling out that a future Government who took a different view from this one could not use the power to direct investments into hand-picked asset classes.

The existing safeguards in the Bill also remain: the time limit, the reporting requirements, the affirmative procedure, and—most importantly—the savers’ interest test that allows pension schemes not to deliver against the reserve power requirements where it is not in savers’ interests to do so.

and again Torsten Bell explains that innovation will be given space to grow, by which he refers in the Bill to superfunds and CDC (which I consider innovation going back and forward- both ensuring that pensions are allowed to be paid).

we are ruling out the ability for the power to be used for any purpose other than for the broad private asset class. That would include questions of specific asset classes, but it would also include questions of geography. I hope that gives him the reassurance he is looking for.

It is also in the interests of savers to tackle the UK’s fragmented pensions landscape. Scale matters: it reduces costs, opens up a wider range of investment strategies and enables more active asset ownership. Those arguments, I think, have cross-party consensus, and they lie behind the measures in the Bill to require pension schemes to operate at scale in the years ahead.

Unfortunately, that policy objective, motivated by a desire to ensure that savers get the best returns, would be undermined by Lords amendments 26 and 37, which seek to create more exemptions from the scale requirements for small schemes.

They would do so in a way that would create ongoing uncertainty for years as schemes, regulators and likely courts debate whether or not the conditions for such exemptions have been met, a process that itself would impose significant costs on savers. Both regulators have expressed their concern that, as a result, these amendments would be inoperable.

I do, however, recognise the case that has been made, in this House and in the other place, for the importance of both competition and innovation in the market.

That is what lies behind the pragmatic approach we have taken to achieving scale: not only have we set a pragmatic £25 billion starting point, but smaller schemes will be given time to reach that point, with the transition pathway lasting until 2035.

The new entrant pathway will also provide a route for truly new and innovative disruptors to enter the market. This supports the policy intent of Lords amendments 35 and 43, which require the Secretary of State to have regard to innovation and competition when making regulations that support scale.

 

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Standard Life could outgun Hargreaves and AJ Bell but none of these retailers will offer pensions.

Posted on April 16, 2026 by henry tapper

You’d think that in insurance terms, yesterday a British club beat off Europe. I’m not talking Arsenal but Standard Life. A few decades  back I worked for Eagle Star and Allied Dunbar and they got eaten by Zurich who set up a new light company capable of competing for savings. That was a failure with the workplace pensions business being sold to Scottish Widows and the rest becoming legacy. The same can be said for several other insurers including Axa , Allianz and now Aegon.

The European model does not work for life insurance in Britain. The big Life insurers left playing are quoted in Britain. Legal & General, Royal London and Standard Life are supplemented by insurers such as Rothesay and Prudential (now M&G) who we can call British and Just, PIC , LV= and Utmost who are in the annuity market and heavily in, usually owned by American private equity companies.

I do not pretend to understand the insurance industry in the way that Gordon Aitken does. He was the man who told us that Standard Life would eat up Aegon and he writes a great analysis of how Standard Life is doing what my Zurich couldn’t do and make money out of being a lite- insurance company.

Here is the analysis of how Standard intends to make money out of managing our money to compete with the investment houses, Hargreaves Lansdown and SJP stand out as super lite savings organisations.

But the trouble for insurers is that the biggest players in the retirement savings market are Nest, People’s and WTW all of which are very lite on insurance to the point that they by-pass if. L&G and Aviva  are of their size and can argue that their value is also as an asset manager. Despite wanting to compete with those in the asset management market Standard Life does not have its own asset management or fund management reputation.

I get this shudder that I got when Allied Dunbar stopped being an advice driven insurers (SJP took the management and the advisers) and Eagle Star stopped being a provider of insurance guarantees. What was left. Zurich had a general insurance business to fall back on. But has Standard anything to fall back on? I suspect that its hope is to compete with L&G and the American firms in buying into and buying out of the £1.2 trillion DB pension market.

It may find a place as an insurer by offering an endgame for DC – now known as “flex and fix” allowing individual savers to feel they have a pot until they get too old to need that privilege when they are annuitized (put to bed in preparation for a wooden box).

But for the most part, I see the statements coming from Andy Biggs as a little lite in ambition, just as Zurich’s were and Gordon Aitken explains

On the announced multiples, Aegon UK is valued at 0.83x Unrestricted Tier 1 own funds (the highest-quality capital on the Solvency II balance sheet, £2.4bn at FY25), 14.2x 2025 operating profit after tax, and 1.9x IFRS shareholders’ equity. On paper the 0.83x looks cheap. There is a straightforward explanation for why it isn’t.

Gordon Aitken looks at the 0.83% through “the synergy premium” and the “embedded value” methodology and concludes that Aegon isn’t worth it on either. He goes on to point out that Aegon is now rid of all the heavy stuff.

The other reason Standard Life is willing to pay 0.83x is the nature of the asset. Aegon UK is fully fee-based. The £9bn UK annuity book went in 2016, £6bn to Rothesay in April and £3bn to L&G in May, at a loss of €628m. Since then Aegon UK has been a workplace pensions, adviser platform and retail savings business with no annuity capital drag. Capital-light fee income is exactly the business mix an acquirer wants in the UK market today.

I cannot pretend to understand Gordon Aitken’s more sophisticated valuation descriptions but I can speak as someone with my money in ISA and workplace pensions , positioned to move into a pension when I can find one. I suspect that there are many people nearing the end of their working lives who want a retirement income that keeps pace with inflation and gives value for money against some internal view of likely returns. I would like more than an annuity, even if it is a “put to bed” flex and fix deferred annuity.

Just as I don’t want to be considered in an “end game” , so I suspect that many pensions are waking up to the idea of there being collective value to be had by remaining invested either on their own or collectively. CDC and superfunds are both challenges to the personal pension model that insurer’s “lite” model is based on. Even if they operate under a master trust, the insurer lite model is to Aitken retail

The challenge is that defined contribution (DC) workplace pensions and retail platforms are a margin-compression story. Auto-enrolment charges are heading towards 30 to 40 basis points, well inside the 75bps auto-enrolment default fund statutory cap (introduced in 2015 and unchanged since). The retail platform fee war, Hargreaves Lansdown against AJ Bell against the insurer platforms, shows no sign of abating.

Fixed cost per pound of assets is what matters. Aegon UK never reached the critical mass to win that fight alone. Stack it onto Standard Life and the combined group becomes the number two in UK Workplace and number two in UK Retail, with £480bn of assets under administration, 16m customers, and pro-forma gross annual flows of £18bn in Workplace and £12bn in Retail. Workplace AUA moves from £71bn to £145bn; the retail business moves up to number two

This new enlarged entity is competing alongside L&G for our savings. Like L&G it will buy-out our pensions and like L&G it is after scale. But L&G (and Zurich) have a general business too. I am not convinced that an insurer is capable of competing in a fierce market without insuring anything. Standard is a broker to reinsurers but shows no appetite for social insurance. I don’t think Standard Life is interested in pensions.

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Today is Pension Bill day in parliament

Posted on April 15, 2026 by henry tapper

 

While I suspect all the interest will be about mandation fudging, my heart goes out to the pensioners who aren’t getting increases. They’ve a long history of expressing themselves memorably and with with good humour

Thanks Jane Foley

You never can forget those with Pre-97 pensions that are still waiting for their increases.

 

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Standard Life buys Aegon UK for £2bn – as predicted.

Posted on April 15, 2026 by henry tapper

We have had through the morning a stream of announcements from various parties

What will this mean for the master trust and dwindling GPP market that Aegon once looked so central to. Scottish Equitable was Aegon before the Dutch bought it and Standard Life it will be as what until recently was Phoenix, snapped it up.

It looks as if Aegon’s UK asset management business will remain with Aegon and will have some role in the Standard Life after the close of the transaction (likely the end of the year). There will be a minor presence on the Standard Life board going forward , presumably to reflect the use of Aegon’s asset management within Standard Life.

This comes as no surprise, I reported lat year that this was the likely outcome of Aegon being put up for sale by a parent more interested in America than the UK. You can read the prediction here.

The Scottish Insurance industry is now down to three with Scottish Widows a part of Lloyds and Royal London (ironically) the only Scottish insurer that is still independent and mutual.

Details

  • Transaction marks the completion of the strategic review of Aegon UK, further supporting Aegon in its ambition to become a leading US life insurance and retirement group
  • The proceeds are valued at GBP 2.0 billion and consist of a shareholding of 15.3% (181.1 million shares) in Standard Life plc (Standard Life) and a cash amount of GBP 0.75 billion. Any remittances taken out of Aegon UK between the signing and closing of the transaction will be deducted from the GBP 0.75 billion cash amount
  • Total consideration equivalent to 14.2x 2025 operating result after tax and 1.9x 2025 IFRS Shareholder’s equity
  • The cash received from the transaction, minus the value of the remittances that were expected to be received from Aegon UK between the signing and the closing of the transaction, is expected to be used for a combination of deleveraging and share buybacks, once the transaction is completed
  • Aegon’s group financial ambitions for 2026 and 2027, as communicated at its Capital Markets Day 2025, will be updated to reflect the transaction announced today, with target growth rates unchanged but starting from an adjusted base level
  • Aegon’s asset management activities in the UK will remain part of Aegon’s global asset manager and will be an important asset management partner for the new combined business
  • The transaction is expected to close around the end of 2026, subject to customary conditions, including regulatory approvals
  • The relationship agreement with Standard Life entitles Aegon to appoint one non-Executive Director on the Board of Standard Life.

Lard Friese, Aegon CEO, commented: “The transaction represents an important step in our ambition to become a leading US life insurance and retirement group. The terms reflect our commitment to creating value for shareholders, and through our shareholding we will benefit from further value creation in the combined business. Standard Life is the right owner for Aegon UK and a good home for our employees: we share the same values and a strong commitment to customers, and together the businesses will create the UK’s largest retirement savings and income provider. Aegon’s asset management business in the UK will remain an important asset management partner to the new combined business.”

Andy Briggs, Standard Life CEO, said: “With financial wellbeing at the heart of everything it does, Aegon UK’s values and culture are aligned with our own. Together, we will not only be stronger, we will be better – helping our customers achieve better outcomes and greater financial security in later life. I look forward to welcoming everyone in Aegon UK to Standard Life in due course and working together to capture the huge potential in front of us.”

Use of proceeds and financial implications

The cash received from the transaction, minus the value of remittances that were expected to be received from Aegon UK between the signing and the closing of the transaction, is expected to be used for a combination of deleveraging and share buy-backs, once the transaction is completed.

Following the completion of the transaction, Aegon’s group financial guidance for 2026 and 2027 will be updated to reflect the divestment of Aegon UK:

  • The group operating result run-rate is expected to grow by around 5% per annum between 2025 and 2027, from a proforma 2025 run-rate of EUR 1.3 – 1.5 billion*
  • OCG after holding funding and operating expenses is expected to grow between 0% and 5% per annum over the same timeframe, from a proforma 2025 run-rate of EUR 0.7-0.75 billion*
  • Free cash flow run rate is expected to increase at around 5% per annum between 2025 and 2027. The free cash flow run-rate will be adjusted by removing the UK contribution (EUR 120 million in 2025 terms) from 2026 onwards and incorporating the free cash flow attributable to the equity stake received as part of the disposal structure post-closing
  • Dividend per share is expected to grow in excess of 5% per annum, which remains unchanged from the CMD 2025 guidance

*The proforma 2025 run-rate figures reflect the run-rate communicated at the CMD 2025, updated to reflect the Aegon UK transaction announced today.

On a pro‑forma 2025 basis, and prior to any deleveraging or share buyback initiatives, the transaction is expected to result in a 5%‑point reduction in the Group Solvency ratio. At the same time, it is expected to have a positive impact of EUR 1.1 billion on Group shareholders’ equity and a negative impact of EUR 0.1 billion on Group Valuation Equity, as the loss of CSM exceeds the positive shareholders’ equity effect. The positive impact on the Group’s net result is expected to be EUR 0.6 billion.

As per Aegon’s accounting policies and until the completion of the transaction, Aegon UK will no longer contribute to the Group Operating result and Operating Capital Generation, and its IFRS result will be reported under “Other income/(charges)”.

The transaction is expected to close around the end of 2026, subject to customary conditions, including regulatory approvals. Following the completion of the transaction, Aegon will enter into a lock-up period with respect to the shares received as part of the transaction. This period will last until the earliest of 18 months following the transaction completion date or the completion of the redomiciliation of Aegon Ltd to the United States.

1. Value of 15.3% stake is based on the closing price of Standard Life’s shares on Tuesday April 14, 2026, and 181,080,690 shares to be received by Aegon upon closing of the transaction as per the agreement.

2. Based on the following 2025 figures for Aegon UK: operating result after tax of GBP 143 million and shareholders equity of GBP 1,077 million

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Common sense should win through and pensions should not repeat past follies

Posted on April 15, 2026 by henry tapper

The headline seems a disaster for pensions.

The ABI and those preying on open DB pensions, are quick to point to the need to insure away the risk of pension paying people deferred pay  in later life.

If you had run a headline just five years ago that bemoaned pension scheme surpluses falling by  10% , you’d have been laughed out of the room.

I remember how those who believed we had hedged pensions against the market found in October 2022 they had wrecked the Treasury’s plan for growth.

Our crazy hedging nearly drove our country to disaster and now we think we are in need of more insurance?

After a fall of £9.9bn leaves our funded DB pensions over a quarter of a trillion pounds to the good (beyond what is needed to meet obligations to pay people in full), are we quaking in our pension boots?

The latest update to the PPF’s 7800 Index, which estimates the section 179 funding position of DB schemes, revealed the aggregate surplus had fallen to £263.8bn, compared to the £273.7bn surplus recorded in February.

I am with John Hamilton who sees the capacity of our pension system to withstand the current market volatility as something to be proud of.

If we want Britain to grow , we need enterprise and we need pension schemes to fund it. Insuring away our chance to grow , shipping money off to Bermuda and buying US private credit is not my idea of investment in the country where we work and where we retire.

We should not forget that the Pension Scheme Chair of Stagecoach Group Pension Scheme prevented his £1.2bn pension scheme from being insured by being innovative and working with another British sponsor – Aberdeen – to keep his members invested and in surplus. Two thirds of the surplus in the Stagecoach Group Pension Scheme goes to the members, how much would have done if the scheme had been bought out by an insurer?

Sadly there is no ABI to stand up for pension schemes like the Stagecoach scheme. If there was we would not have to make these arguments on linked in and on this blog. The fact is that the marketing budget is with the insurers and so long as the ABI has the press and the Treasury in their pockets, it will be difficult for the likes of John Hamilton to get our ears.

But with 75% of schemes in surplus (TPR stat) and consultants finally seeing the advantages to them (as well as pensions) of keeping DB plans running on, I suspect that common sense will win through.

Here are PPF’s current numbers

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Normalising workplace pensions as the best way to get deferred pay .

Posted on April 15, 2026 by henry tapper

The 21t century system downgrades “retirement benefits” to being part of “intangible reward”.

The UK workplace pension should not be a “benefit” and part of “intangible reward”. We do not get “intangible reward” as getting paid!

The workplace pension is currently seen as a “tax” like national insurance for employers

As I examine the market for Collective DC I find myself talking with trade associations and unions who take responsible for the affairs of thousands of small companies. Some start ups use the HMRC’s payroll to establish a workplace pension, some more established small firms are looking for an advantage from being in one of the large DC plans and there are a large numbers of businesses who out of habit have paid sums to large DB schemes such as LGPS to be members of an ongoing DB plan. So a wide range of solutions for smaller employers but with one thing in common.

All employers are subject to the Pension Regulators Auto-Enrolment framework and have to pay at least minimum payments against band earnings to obey the law. They get fined by TPR if they don’t, they have to be compliant,

Right now, the vast majority of small employers see compliance with the rules for paying into workplace pensions as what their duties are about but that may change. When we move from “pot to pension” which will happen when the dashboard arrives and displays the pot as pension, then I suspect that a claim that CDC pays up to 60% more pension will become more real for small players. Infact every employer, if they consider that they are putting by a part of staff’s wages for deferred payment of pension, will start thinking of pensions not as a benefit but as “reward”.

But most employers – especially small employers – see “pensions” as an extra tax they have to meet on employment. We need to change “tax” for “pay”. Here’s a typical description of pensions that describes pensions by focussing on contributions not outcomes

This is what employers see. They do not see and do not sell to staff the idea of this money paying people in later life.

The auto-enrolment system has not yet been considered as part of pay – of reward – of deferred salary – call it what you want. But if workplace pensions start being seen as pensions (the Pension Schemes Bill will help that to happen) then CDC will be seen by employers who compete for staff in recruitment markets dominated by rates of pay.

This is why pensions used to be so much part of the pay settlement between employers and their staff, pensions were and still are in some sectors , a business where union pension officers take the auto-enrolment rules as a means to negotiate pay and deferred pay (pension).

I see the unionised parts of the employer market as critical to the success of UMES CDC – that’s the workplace pension part of the new pension focussed workplace pension!

Unions need to start negotiating with employers based not just on pay today but deferred pay from retirement and if they cannot increase the amount paid into pensions, at least improve the amount coming out of what’s saved into.  If unions and unionised employer can come to an agreement to move from workplace pensions into DC to a workplace pension paying higher deferred pay then a pay rise over inflation has been achieved, at no cost (over what would have been paid as part of the standard agreement).

Giving pay rises over inflation at no extra cost to the employer – inflationary?

The answer is  a resounding no when the extra pay is deferred to retirement. We know that millions reach retirement with not enough to pay them a living wage for the rest of their days. Putting all employers in retirement in a position to meet bills and not rely on others (most especially the tax-payer) is not inflationary, it is about intergenerational fairness and a way of making each generation confident about their future.

Putting pensions back as part of our “reward”

I thought that was what private pensions were doing when I was young but we threw the private  DB pensions out as something we could afford for younger people (many people never got a DB pension and were dependent on state pension and SERPS. Auto-enrolment opened the door to a much wider group of workers and though only 55% of workers are saving into workplace pensions, we have another Pensions Commission working on expanding that number towards 100%.

We may not be able to increase contributions to the 12% of pay that is compulsory for employers to pay into Australian Super, but we can increase the deferred pay from workplace pensions into which we’re auto-enrolled by up to 60%. We may think that the DC system we have today is sufficient but I think I’m speaking there for those who  are benefiting most from DC workplace pensions – those in the pension industry. For those who see pensions as deferred pay, CDC may be a better way to put money away for later life.

Right now most  employers don’t see their workplace pension as “deferred pay”, if they did they’d value it and so would their staff. Pensions are part of  “reward” not “benefits”.

Turning getting paid later into a positive.

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