Is it worth having an intellectual education- or is work the best university

I spent a good part of a morning last week in the FT, talking with journalists about pensions but also about the predicament the children of parents have, once they’ve graduated.

It doesn’t surprise me that the paper bemoans the financial plight of British grads today. Not only do they get less of a pay premium for a good degree but they have loans to repay if they find half way lucrative work. There is an incentive to fail and little incentive to succeed.

The atmosphere of Bracken House by St Pauls is far from that of the offices and bars and sandwich and coffee shops around it. It is a place of erudition where people discuss the kind of problems that middle class graduates have as they try to create and bring up families while seeing the value of intellectual investment being down valued. I mean that there is precious little of the intellectual brilliance that I see coming from the FT being reflected in conversations beyond its four walls!

Ironically, the only way that recent graduates can be measured objectively is by their salary premium, how much they earn more for giving up a minimum of work to get a degree

We have more graduates as a share of the workforce than any other country analysed but it pays our graduates less (and that’s before counting in the student loan and the loss of earnings that occurred when young people at college earn little more than pin money.

John Burn-Murdoch’s argument in this morning’s paper asks the question of this blog,

“is university still worth it?”

He concludes this is the wrong question and points to a lack of productivity in Britain as the start middle and ending of the graduate’s woes.

Like so many of contemporary Britain’s problems, the graduate squeeze is downstream of broader economic woes. Efforts to alleviate it would do better to focus on restoring growth than making tweaks to higher education intake and financing.

If Britain can haul its productivity growth and skilled job creation back into line with its peers, graduate earnings will be stronger, enabling student loan terms to be more generous and allowing more young people to pursue their passions confident of landing a good job.

I am not so sure. There is an intellectual curiosity in science and in arts that has led to Britain being the hotbed of the scientific revolution (along with California the London , Cambridge Oxford triangle is driving the West’s progression). Britain is the world leader in music, drama and our culture in general is admired – could any country in the world put on the proms or host Glastonbury or offer Shakespeare and other drama on the South Bank and in Stratford?

My concern is that we have down valued the intellectual brilliance of science and arts in this country to the point where we recognise nothing that cannot be put on a chart and measured in accountancy terms. We cannot just work harder to get richer, we must be smarter and learn to make our superiority in Science and the Arts (these intellectual hotspots) what Britain is about and rewarded for.

This is what I thought as I walked out of the FT last week and it’s a thought that’s still whizzing around my ageing brain. We simply do not value graduates for what they are. John Keats wrote a lifetime’s work in the year that he was 23. Some reckon he died broken by criticism not TB.

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Providing pension savers – with help on performance

It is good to see some proper work being done on Value for Money

The Times article is here

Written by Times Senior Money Reporter Megan Harwood-Baynes


Where your pension is invested could mean the difference between retiring as a millionaire or being left with less than a penny, new analysis shows.

The personal finance site Investing Insiders looked at the performance of almost 13,000 pension funds, creating league tables to show the best and worst performing across different risk profiles (high, medium and low).

It found that taking a “select and forget” approach to funds may not just mean a slightly smaller pot — it could leave it empty.

Pensions are usually invested in a wide range of assets, including lots of different funds, plus less risky options such as cash. Investing Insiders looked at two scenarios where hypothetical investors invested all their money in one fund.

Person A saved £50,000 in the best-performing fund (Aviva Ninety One Global Gold Pension) in December 2020 and over the next five years got a 180.28 per cent return on their investment, increasing their pot to £140,140.

Person B saved their £50,000 in the worst-performing fund (Zurich JPM Emerging Europe Equity), which lost 98.59 per cent in five years, leaving £705 in their pot.

If that same trajectory continued over the next two decades, Person A would have a pension pot worth more than £3 million. Person B would be left with a fraction of a penny. These calculations include fund fees, but not investment platform charges.

Both funds are categorised as high risk, so would be offered to people with the same appetite for volatility.

Clare West from Investing Insiders said: “Sustained for 20 years, those kinds of returns are capable of producing either multi-million growth at one end of the spectrum, or near total wipeout at the other end.”

It’s an extreme scenario because most default pension schemes will invest in a wide range of funds and asset types, but it demonstrates the importance of diversification.

It also shows that you need to monitor where your money is invested in case something has gone badly wrong at one of your funds — as it did at many of the worst performers.

Zurich UK said its Emerging Europe Equity fund is self-selected by savers or through their financial adviser, and is not a default pension fund. It was suspended in February 2022 after sanctions were introduced following Russia’s invasion of Ukraine.

Zurich UK said: “The fund contains only the sanctioned assets and, as a result, shows very little value and low returns.”

Investing Insiders also looked at the returns on funds classed as medium-risk, where it had 20 years’ worth of data to analyse.

A saver who put £50,000 into the Zurich American Select fund in 2005 would have seen growth of 855 per cent, leaving them with a pot of £477,525. But the same amount placed in the Clerical Medical UK Equity fund would be worth £92,835, which returned 85.67 per cent during the same time.

West said:
We know of people who have lost track of a pension pot, gone back to find it, and the past performance and the investment fees have eaten away, and there’s nothing left.”

Donato Boccardi, the head of investments at Aviva, said:

“By their very nature, default investment strategies are designed to do the heavy lifting for you, placing investment decisions in the hands of experts. But while defaults are essential, making small active changes to your pension — particularly increasing contribution levels — can have a significant impact.”


The problem with default schemes

While the risk of leaving your money in just one fund is clear, a select and forget approach can also lead to lower returns on a well-diversified workplace scheme.

The Financial Conduct Authority, the City regulator, has raised concerns that millions are being auto-enrolled into workplace pension schemes that don’t match their needs. In January it said it wants pension schemes to publish transparent data on their performance, costs and service quality.

Lily Megson-Harvey from the advice firm My Pension Expert said:

“Not every workplace pension grows at the same rate. While that may be concerning for some savers, it also highlights the importance of staying engaged with your retirement savings.”

Workplace pensions often utilise an automated strategy, called “lifestyling”, which matches risk to your age. In your younger years the scheme is “ambitious”, which allocates most of your money to equities, to generate maximum growth and benefit from the many years of compounding interest ahead, because you have time to weather any short-term volatility in the stock market.

As you approach your target retirement age, the scheme starts to take less risk, shifting your capital away from volatile stocks and into more stable assets, such as bonds, gilts and cash. This is designed to protect the gains made in earlier years and ensure a sudden crash right before you retire doesn’t wipe out a big chunk of your life savings.

But millions of workers may find themselves in a one-size-fits-all default scheme that is too cautious for them, especially if they are young and have decades until retirement. Being too cautious too early can leave a huge dent in their eventual retirement pot.

averages to see how it measures up. It’s also important to track down old workplace pensions and check if consolidating them makes sense, so you aren’t paying multiple sets of fees.

Most workplace pension schemes offer a range of investing options, so if you feel like it is a bad match for your personal risk appetite and retirement goals, you can move to something else.

“But this isn’t a decision to take on a whim,”

said Craig Rickman from the investment platform Interactive Investor.

“Do your research first and foremost, checking if your scheme has indeed stacked up unfavourably against its peers and/or its benchmark over a reasonable period, and making sure comparisons are on a like-for-like basis”

Crucially, just because a fund, region or sector is riding high now does not mean it will continue to do so. Investing is a long-term game, especially if you are trying to build enough wealth to live on in your later years.

“Constantly churning your long-term investments to chase the best-performing funds is not only a chore but can do more harm than good,”

Rickman said.


All graphs have been provided by Investing Insiders

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Will US insurers buy out our pensions with recycled Blue Owl private credit?

This is a ramping up of an investment crisis which is growing in the USA but thankfully not in the UK and Europe.

Private credit group Blue Owl will permanently restrict investors from withdrawing their cash from its inaugural private retail debt fund, backtracking from an earlier plan to reopen to redemptions this quarter.

This is a spectacular about return from one of America’s largest private equity fund managers

The New York investment group on Wednesday said investors in Blue Owl Capital Corp II would no longer be able to redeem their investments in quarterly intervals but that the company would instead return investors’ capital in episodic payments as it sells down assets in coming quarters and years.

And the FT is making its readers just what this means

The decision underlines the risks facing retail investors, who have ploughed hundreds of billions of dollars into funds with limited liquidity rights.

It’s also a big problem for Blue Owl which is suffering a loss of confidence from its shareholders and the market.

This is not good for shareholders and it certainly isn’t good for retail customers

So where is Blue Owl going to be able to sell its private bond assets to get the liquidity to satisfy its retail customers?

It [Blue Owl]said pension funds and insurance companies would buy the loans at an average of 99.8 per cent of their carrying value using new vehicles to be managed by Blue Owl.

Surely they don’t mean the pension and insurance companies that have been buying into and buying out our UK pension schemes?

If I was the PRA, I would be looking long and hard at what is happening with Blue Owl because if these private market bonds are being relied on to pay UK pensions , they should be very worried indeed.

The lock in of Blue Owl’s Capital Corp II’s retail investors, comes at a bad time

Wednesday’s deal comes amid heightened scrutiny into the quality of private credit loans after a number of high-profile defaults and rising fears over the exposures portfolios have to software companies vulnerable to AI disruption.


We have been selling UK insurers to American insurers. They include PIC, Just and Utmost. American buy-out money is cheap but is it backed by private credit that will never be repaid? Blue Owl worries me a lot.

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McPhail; “don’t rely on state pension if you’re young”.

The state pension in its current form is unsustainable, both fiscally and politically. I don’t think it should be scrapped but its inexorable upward increase has to be curbed. Over time, its value should drop back and means-tested post retirement welfare should take up the slack: less universal benefits, more targeted. Tom McPhail on Linked in


Tom McPhail

I’m not scaremongering. A means-tested state pension is inevitable

We need to aim our limited welfare budget at those who genuinely need it

Given the increasingly dire state of the economy, a means-tested state pension might now be inevitable.

I’ve argued before in these pages that a possible solution could involve increasing the state pension age to 75, and it’s fair to say this met with some resistance. But would means-testing it be a better alternative?

If you are minded to dismiss this speculation as mere scaremongering, consider the facts. In 1970 there were roughly five workers paying into the tax system for every retired person. Today the ratio is three to one and by 2070 it is expected to be two to one. The state pension costs about £150 billion a year, an increase of about 60 per cent in the past ten years, driven by the generous triple lock as well as the demands of a growing pensioner population.

The state pension already accounts for more than 40 per cent of our welfare budget, according to the Office for Budget Responsibility (OBR), and its cost is expected to rise further. The OBR predicts that spending on the state pension will rise from about 5 per cent of GDP today to 7.7 per cent by the early 2070s. This is not sustainable.

Many pensioners absolutely need and rely on their state pension. We can’t let them down. Pensioner poverty is still a problem, particularly for older, single pensioners.

Pensioner affluence is a thing too though. I have seen first-hand many pensioners who enjoy, but who also absolutely do not need, the £10,000 to £15,000 a year that they get from the state. Many of today’s pensioners own their own home and enjoyed the benefits of working lives building up guaranteed pensions through the latter part of the 20th century.

Wealth taxes have been espoused by some populist agitators, but before we go down that road, maybe we should simply ask why we hand out triple-locked welfare payments to those who don’t need it?

The triple lock has increased the state pension by the higher of inflation, wage growth or 2.5 per cent each year since 2012. And this increasing cost comes against a backdrop of stagnant per capita economic growth, which has averaged less than 1 per cent a year over the past 25 years.

There has been much discussion in the news recently about the usurious cost of student debt, with the government charging interest rates that would make a mafia loan shark blush. Those same graduates now face an uncertain job market and impossibly high house prices: in what reality does it seem fair to keep taxing them to pay for today’s pensioners?

Our national debt is fast approaching 100 per cent of our annual economic output. The cost of servicing that debt is now more than £100 billion a year. We spend more on debt interest than we do on education, more than we spend on transport and defence combined. In only a handful of years over the last few decades has the government actually managed to reduce our debt. The default setting is to borrow, borrow, and borrow more every year. This too is unsustainable. The imperative for economic growth and reduced public spending demands hard choices of our politicians.

And how could means-testing the state pension work? We already have pension credit, a means-tested top up for pensioners on low incomes, which only costs about £6 billion a year. It could be possible to dispense with the triple lock and deliberately allow the state pension to fall back in real terms, while at the same time significantly increasing the generosity of pension credit. This would target our limited welfare budget towards those who genuinely need it.

Politically, this is fraught with danger, given pensioners’ electoral clout. But if not this, then what is the answer? A change to the system is essential and inevitable. Sooner or later some brave or unlucky politician is going to have to grasp this nettle. In the meantime, the younger you are, the less reliance I would advise you to place on the state to see you through retirement.
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Tending wanted growth, weeding where needed; the policy maker’s a gardener


Policy-making as gardening

 

Policy-makers must be more like gardeners than mechanics says Chris Dillow


“Those who cannot remember the past are condemned to repeat it”

said George Santayana. Such has been the fate of Sir Keir Starmer, who recently said:

My experience as Prime Minister is of frustration that every time I go to pull a lever, there are a whole bunch of regulations, consultations and arm’s length bodies that mean the action from pulling the lever to delivery is longer than I think it ought to be, which is among the reasons I want to cut down on regulation generally and within Government.

He is not of course the first minister to discover this. The diaries of Tony Benn and Richard Crossman express frustration at the difficulty of getting things done. And in 1999 Tony Blair spoke of having “scars on my back” from trying to reform public services. Writing in 2008 David Richards, David Blunkett and Helen Mathers described (pdf) three decades of frustration with policy-making:

A minister might pull a policy lever only to discover later that it has not had the desired effect.

In believing that there are such levers politicians are following some defunct economist. In 1949 Bill Phillips built a machine which, he thought, represented the economy. Partly, it did; it showed the circular flow of income and it reminded us that the economy is not an act of nature but a creation of humankind – and what humans can create they can change. But partly it did not, as it omitted important things such as inequality, environmental degradation, supply shocks, growth and innovation.

Polly McKenzie draws an inference from all this – that the “levers of government” is an unhelpful dead metaphor:

The economy is not a thing but an aggregation of billions of decisions, each made on the basis of incentives, opportunities and desires…Government has tools, it’s just that they are not mechanically connected into that system like a lever is.

Giles Wilkes agrees:

All physical analogies for working on the economy are misleading and imply the sort of direct causality, measurability, clear categories and obvious relationships that barely ever applies.

They’re right.

But, but, but. As George Lakoff has shown, metaphorical thinking is ubiquitous. When we confront abstractions such as the economy, politics, nature, or moral questions, we use metaphors to try to make sense of them. Asking us to forego all metaphors is a counsel of perfection. Metaphors are like models (in fact, models are metaphors): all are wrong, but some are useful in some contexts.

On the basis that it takes a metaphor to kill a metaphor, but subject to that caveat, I’d suggest an alternative – to regard the economy and society not as a machine but as a garden.

For one thing, you do not make a garden just as you choose. You cannot simply impose a vision. What you grow depends upon the type of soil; how much sun you get; how long your growing season is; how much space you have and so on. You need to work with what you’ve got, not against it. It’s similar in policy-making. You need to work with and through civil servants, not merely rail against the “blob”. And you must remember Burke’s words:

Circumstances (which with some gentlemen pass for nothing) give in reality to every political principle its distinguishing colour, and discriminating effect. The circumstances are what render every civil and political scheme beneficial or noxious to mankind.

This was one way in which Truss went wrong. Fiscally expansionary tax cuts might have worked in a depression. But they didn’t when markets were worrying about inflation. The circumstances rendered her scheme noxious.

Truss is mad, but this government is guilty of something similar. The UK economy’s comparative advantage lies to a large degree in higher education and creative industries; these are some of our garden’s most succesful plants.

But the government is putting weedkiller onto these by taxing overseas students; allowing nibmys to close down music venues; making it harder for musicians to tour Europe; and allowing tech companies to steal writers’ work.

Meanwhile it is also trying to grow flowers that are not well-suited by subsiding steel and chemical industries, like trying to grow a mediterranean garden in north-facing clay soil.

“Cut your losers and run your winners”

applies in gardening as well as investing. The government seems not to realize this.

Both gardening and policy-making are forms of guided emergence. Societies are the product of human actions but not of human design, which is why the machine metaphor is at best only half-right. Similarly, gardeners cannot easily predict exactly how their garden will look because of course the weather (among other things) will intervene. What they can do is simply create the best chances for plants to thrive by feeding and watering them properly, and putting them in the right light and soil. So it is with governments. They can provide the right conditions for a thriving people and economy (to a much greater extent than it is actually doing so now) but they cannot guarantee that they will indeed thrive.

This is not to say that conditions are always a binding constraint. Gardeners prepare soil by mulching and composting, or improving the drainage of clay soils or by changing the acidity of the soil. Good politicians do something similar; they know that public opinion is not a fixed datum but is something malleable.

In Thinking the Unthinkable Richard Cockett describes how thinktanks such as the IEA and CPS spent years preparing the ideological ground for Thatcherism. And Thatcher herself did not immediately embark upon that project; it was not until her second term of office that she began serious privatization and attacks on the NUM. You must plant at the right time.

Her epigones, however, have not been so wise. Osborne and Cameron failed to cut the size of the state in part because they never made a serious ideological case for doing so or had a means of identifying genuine waste, instead hiding behind mindless drivel about the “nation’s credit card”. And Starmer did not devote enough effort in opposition to understanding just how effort much is needed to repair the economy and public services.

Some constraints are binding; the neighbour’s fence or the position of the sun. Others are not so much. Equally, politicians must know what’s a binding constraint and what isn’t.

A further parallel between gardening and politics is that in both, change takes time. All gardeners know the need for patience, if only because it can take years for plants to grow. The same is true of social change. Shifting tens of thousands of people from some jobs to others takes a long time. One of the right’s consistent errors has been to under-appreciate this. Just as it was wrong to think unemployed miners in the 80s would soon find new jobs, so it wrongly though that companies could quickly divert trade efforts from the EU to non-EU countries. But economies and people don’t work this way. Change takes time.

Which leads to another similarity between gardening and policy-making. Gardens are almost never perfect; there are always some plants that aren’t (yet) thriving. Similarly, there is, as Adam Smith said, “a great deal of ruin in a nation.” Which is inevitable, because there are trade-offs. Do you want a benefit system that errs on the side of generosity or meanness? Do you want efficient public services or ones that have some slack in them to respond to emergencies? Do you want a simple tax system with some inequities, or a more complicated one with deadweight costs?

Some things, therefore, we must just live with. In gardening, said Gertrude Jekyll, “one has not only to acquire a knowledge of what to do, but also to gain some wisdom in perceiving what it is well to let alone.” At this time of year, for example, it’s tempting to start weeding – and in doing so to dig up perennials by accident. Echoing her, the late John Cushnie would often tell listeners to Gardeners’ Question Time:

“it’s not worth the bother.”

Politicians, by contrast, rarely heed this, preferring, in Jaap Stam’s words, to be “busy cunts.”

There’s one more similarity. Gardening isn’t only about encouraging growth. We also need to destroy things – to kill weeds and pests; to prune branches; and even to cut out whole plants. Sometimes, we need a chainsaw.

The same is true of politics: you must not only cultivate client groups but also weaken or destroy opposing interests, as Thatcher, for example, attacked trades unions. Politics isn’t only about technocratic fixes, hawking product like market traders, and TV soundbites. It is about forming and weakening interest groups.

In this respect, Shakespeare knew more than we know today, our brains having been addled by moronic current affairs shows. In Richard II he has a gardener say of Richard:

O, what pity is it
That he had not so trimmed and dressed his land
As we this garden! We at time of year
Do wound the bark, the skin of our fruit trees,
Lest, being overproud in sap and blood,
With too much riches it confound itself.
Had he done so to great and growing men,
They might have lived to bear and he to taste
Their fruits of duty. Superfluous branches
We lop away, that bearing boughs may live.
Had he done so, himself had borne the crown,
Which waste of idle hours hath quite thrown down (Act 3 scene 4).

Bolingbroke spoke of  enemies as pests:

The caterpillars of the commonwealth,
Which I have sworn to weed and pluck away.

He had them killed. Like nature, politics is and has to be red in tooth and claw.

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Tribunal upholds bans and fines for reckless pension advisers and fund manager

This is an announcement on 18th February by the FCA

Mr Burdett and Mr Goodchild previously held senior roles at Synergy Wealth Limited (Synergy) and Westbury Private Clients LLP (Westbury), respectively.

The FCA banned the pair from working in regulated financial services for recklessly exposing pension holders to unsuitable investments.

The Tribunal also found that it was appropriate for the FCA to impose penalties of £265,071 on Mr Burdett and £47,600 on Mr Goodchild.

Because of Mr Burdett, 232 personal pension funds worth over £10 million were switched into high-risk investment portfolios that were obviously unsuitable. The portfolios were created and managed by Mr Goodchild at Westbury, with around 38% of overall holdings linked to a single offshore property developer.

Despite his knowledge that the portfolios were high-risk, Mr Burdett allowed Synergy’s customers to receive reports indicating that their money would be placed in low or medium risk portfolios. Mr Goodchild included the misleading terms ‘cautious’ and ‘balanced‘ in the names of 2 of the 3 high-risk portfolios.

In addition, Mr Burdett acted as a director of Synergy despite knowing he did not have the required FCA approval to perform that function. He also failed to co-operate with the FCA’s investigation.

The FCA intervened in 2016 to protect consumers, stopping the pensions business of Synergy and Westbury. Both firms subsequently went into liquidation and were dissolved.

To date, the Financial Services Compensation Scheme (FSCS) has paid out over £1.4m to victims.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said:

‘People trusted Mr Burdett and Mr Goodchild with their hard-earned savings and were badly let down. The pair worked together to switch customers’ pensions into obviously unsuitable, high-risk investments.

‘They made significant personal profits from their actions. We will not tolerate such conduct and are pleased that the Tribunal agrees.’

The Tribunal noted that ‘Mr Burdett’s actions have shown little regard for the interests of Synergy’s clients, pension holders whose pensions were transferred to the Westbury SIPP and were invested in ways which Mr Burdett knew were obviously high risk and hopelessly inappropriate’.

In addition, the Tribunal found that

‘As an experienced and qualified investment manager, Mr Goodchild must have known of the risk of putting together for pension holders of varying risk appetites portfolios with any significant levels of concentration of investment into an obviously high risk project… He completely ignored this risk, without regard to the interests of the pension holders’.

The Tribunal was not satisfied that Mr Goodchild’s

‘cursory due diligence … was even remotely sufficient to constitute reasonable steps to ensure suitability.’


This follows an announcement on 19th January

The FCA’s decision to ban Darren Antony Reynolds from working in financial services and fine him £2,037,892 has been upheld by the Upper Tribunal.

The FCA’s decision to ban Darren Antony Reynolds from working in financial services and fine him £2,037,892 has been upheld by the Upper Tribunal.

Mr Reynolds was dishonest when he gave pension transfer advice and investment recommendations to his customers, causing them significant harm.

Mr Reynolds showed a clear disregard for his customers’ interests. He encouraged British Steel Pension Scheme members to transfer out of their defined benefit pension scheme, despite knowing that the advice was wholly unsuitable. He also advised his customers to invest in high-risk and unsuitable products while at the same time hiding high exit fees and falsifying documents.

Mr Reynolds’ misconduct exposed hundreds of people to serious financial loss. Over £17.6m has been paid in compensation to more than 470 affected customers, many of whom suffered losses in excess of statutory compensation limits.

In addition, Mr Reynolds let 2 unapproved people give pension advice, putting customers at risk. When confronted with his misconduct he lied to regulators, allowed important evidence to be destroyed, and moved his family home into a trust to avoid paying his debts.

Therese Chambers, joint executive director of Enforcement and Market Oversight at the FCA, said:

‘Mr Reynolds’ misconduct was the worst we saw out of all the British Steel Pension Scheme cases, and he caused untold damage to his clients. He acted in a way that was corrupt and dishonest, putting his own profits before people’s pensions and acting without integrity as he tried to cover his tracks.

‘He has spent many years trying to evade responsibility for his actions. The Tribunal’s full endorsement of our findings now brings those efforts to avoid accountability to an end. We will pursue recovery of the penalty to the fullest possible extent and will not hesitate to bankrupt him if necessary. We will ensure that he does not retain a single penny of his corrupt profits.’

The Tribunal noted that ‘Mr Reynolds is clearly guilty of dreadful misconduct over a protracted period, which had very serious adverse impacts on a large number of retail customers. He is, as the Authority alleged, a corrupt and dishonest man lacking integrity.’

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The risks to pension providers who issue contracts but provide no pension

This post is profound and worrying – worrying because we are not addressing the concerns those in  personal pensions have when they get to taking their money,

We talk of contract based pensions as if they were comparable to trust based pensions but do we really understand the difference?

When we are simply building up a pot we may not worry if we are being looked after by a trustee but when we get to taking our money back , what does the contract say?

It is not enough to leave those with contracts on their own when they want their money, we need to help them as if they had trustees. We do not seem too concerned about contracts, Johan is.

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TPR must show “market oversight” that includes CDC!

I am surprised and frankly disappointed to hear the mission statement of our new “Interim” Executive Director of Market Oversight.

Less than a year ago we were welcoming an interim to this job in Julian Lyne, now we have another and we are promised that at some point in the future we will have an executive (who sits on the Executive Board of TPR) who is there for the foreseeable.


What is Ben’s “market oversight”?

It is DB and DC, this despite there being a 130,000 CDC scheme under its regulation, nor that there is an authorisation of UMES whole of life CDC’s being launched by TPR at the end of July.

It really is time that TPR made its mind up both about its long term future for “market oversight” and its commitment to CDC.

I know Ben and he’s a decent bloke. He’s put in his time in commercial roles within the industry. But is this really what the UK is interested in from Pensions? This from the announcements put out to excite us a few days before we meet in Edinburgh.

With the current Pension Schemes Bill poised to transform the pensions sector, Ben will continue our transition to a more prudential-style of regulation as the pensions landscape consolidates towards fewer, larger schemes.

Professional Pensions delivers this , to welcome a new face to the Pensions Regulator Board

Gunnee is a senior institutional business leader with over 25 years’ experience in the pensions industry. He previously held several roles at Mercer over a 17-year period and was most recently head of global institutional sales and business development at Gresham House.

He replaces TPR’s current interim executive director Julian Lyne, who is taking on a new role with an investment management firm.

Alongside Gunnee’s appointment, the regulator has launched a recruitment process to appoint a permanent executive director of market oversight.

TPR chief executive Nausicaa Delfas said:

“I am delighted Ben is joining us as interim executive director of market oversight. His financial services expertise and market knowledge will be invaluable as we focus on the practical implementation of the pension reform agenda and deliver the best possible outcomes for savers.

“I would also like to thank Julian Lyne for his very positive contribution at TPR, and wish him all the best in his new role.”

Gunnee added:

I am excited to be stepping into this role at one of the most important times for pensions. We have the opportunity to build a resilient and well-functioning defined contribution market, provide security for members of defined benefit schemes and drive stronger governance across private and public sector schemes. TPR’s role in bringing about these changes will be crucial.” 

There is no mention from Ben either. It is as if TPR has no interest in a product that the DWP has promoted with game-changing claims.

“Up to 60%” better pensions for ordinary people is the strap line for all DWP’s statement on the subject

So what are we to follow? Should we be looking for ways to get CDC schemes authorised and up and running by early 2027 or should we be focussing on DB and DC as we have these past quarter of a century?

DB, DC and CDC please. The market is moving on Ben and Nausicaa!


Footnote

It is worth clicking on the announcement on linked in and consider the use of social media in matters such as this

All ok then?

 

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Value for Money matters in housing as it does in pensions.

There is a congruence between the FT and the Guardian about the financial impact of allowing value of leasehold is falling most dramatic in London but now all over Britain. This is a pension blog, but we must remember that housing is a cost but also an investment for both young and old. Here is Harry Scoffin.

There is an argument that Covid made the idea of living close to where you work irrelevant. Many people who previously worked 5 days in a fixed workplace may only do two or three and this attracts people  to bigger houses rather than smaller flats.

This is not a financial but a lifestyle factor but what Harry and the Free Leaseholders argue for is freedom from ground rents and pernicious charges by managing agents that they have no control over but which makes the cost of a flat much more than mortgage and council tax, a raft of extra costs are levied. These are not transparent, not monitored and most certainly not regulated.

Were leaseholders extra charges such as ground rent, to come under the FCA, you can be sure that their would be more than a £250 cap. There would be a question of “value for money” that would lead to the end of ground rents altogether. When it comes to ownership of assets, the parallels between the rights of a pensioner and those of a leaseholder starkly display the pensioner being protected while the leaseholder is exposed to a range of costs that would not detract from a pension payment.

It really is time that we recognised the issues around flat holding and recognise the rights of leasehold to value for their money.

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A glimmer of light on the gender and ethnicity pensions gap.

Monty Hadadi needs no introduction , nor do the authors of the report he posts about; – Kim Gubler now of IGG, Smart Pension and LCP


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Home – A glimmer of light on the horizon

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