Should we conserve the countryside? Eton College v who? Not me!

Posted on May 2, 2026 by henry tapper

I take it that this picture includes Windsor Castle behind an ugly urban scape encroaching the curves of the downs which are threatened. The downs are being threatened by Eton College , Windsor Castle’s sky scape dominates the view of Eton college.

As I write a crow and a rat are eating the bird food while a red kite is above the river Thames.  To suppose that Eton, where I am, or Windsor Castle , on whose skyscape I gaze, are idyllic is to ignore the threat of nature! To suppose that the downs on which Eton want to build a town are immune from nature’s threats is silly, living in the country has different threats and ones most un- supposed by those who live in towns.

I can live with river rats and voracious crows and I can live with hunting birds out to pick on baby ducks. That’s what happens.

As I’ve been watching this cruel stuff, I’ve been looking at the Downs and the village Eton College wants to develop as a New Town. I am sitting on land once owned by Eton and sold for housing in the 1990s, I look over water, feed birds and have Eton as my neighbour. I do not find Eton a bad neighbour and I’m not sure that looking at this campaign I buy the arguments. Eton owns that land, it too is a beautiful spot and many people will end up living as I do.

The downs are a place for those who want to protect what has been rural for as long as memory lasts but things change. In parts of Scotland, rural splendour has returned since the people left in 19th and 20th centuries. People move around and we cannot use conservation as an argument if we do not know the demographics of our country.

The website is here.  https://www.donturbanisethedowns.com/what-were-fighting-to-protect

The URL says it all, this is about conservatism and not progress. Eton teaches boys who have the privilege that most children don’t. I would be interested to know what Eton College will do with the money they receive if the new town is built and its houses are sold for profit.

The website has a rant at Eton but it is never quite as simple as it seems

Our loss will be Eton and Welbeck’s gain. The intention of this scheme seems to be more about increasing the value of the land for Welbeck and Eton College by gaining planning permission rather than building houses to meet any real local housing need. This scheme makes no sense as a way to benefit local people and it is doubtful that even people further afield will benefit by gaining access to truly affordable housing.

Image from UnSplash - @anniespratt

In the end you can’t help but ask why Eton College is risking its reputation by associating itself with a development that makes no sense in terms of local need? It seems to be a purely speculative land venture designed to achieve a one-off increase in the value of the assets of an already very wealthy organisation, to serve the privileged at the expense of the rest of us.

A part of me is for the empty downs and the delight of open space but another part of me wants the rehousing of people in a good place to live. A part of me wonders what good may come from money coming into Eton.

The development is not in the Downs but on land adjacent to it. It is near Plumpton, my only association with the area (a nice racecourse).

I was sent the website by a friend who lives in the City of London which suggests that I am not the only one to being asked to get involved who lives nowhere near this beautiful sight.

There are many like me and my friend, asked to consider this development as a natural disaster.  I bet there aren’t many of us who aren’t acting out of selfish emotion for the past, rather than a delight for progress.

Screenshot

 

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Trustee’s diminishing space to exert independent conviction

Posted on May 2, 2026 by henry tapper

A friend of mine who I respect a lot tells me that pension trustees should be abolished. It is not a view that can be taken seriously at a time when the various pension codes issued by the Pensions Regulator place such importance on trustees. But the challenge now is that trustees spend more time being compliant to these codes than caring for their members.

It could be argued that their fiduciary responsibility to members is to exercise what they consider the best for members , but I wonder how many trustees are these days taking their own decisions when it comes to investment. They choose their advisers it is true but the advisers then choose the strategy and have a major say in its implementation. To say that trustees take fiduciary responsibility is to ignore both compliance to the regulatory codes and the advice of consultants and no trustees is going to do either, unless very brave.

For the most part, trustees boards are ridding themselves of representatives who act for the member (the member nominated trustee) or the sponsor (the employer sponsored trustee). The rise of multi-employer DC schemes (and soon CDC schemes) allows trustee boards to be given over to corporate trustees who may act in their own name or that of the corporate trustee body. Either way they are arguing that they should be the voice of trustees in schemes.

An office or a prison for trustee’s views?

Most recently, trustees have (for the new CDC schemes) been banned from marketing or promoting their scheme, again their fiduciary responsibility is being defined by a third party.

Trustees are responsible however for acting as compliance officer on the material of the CDC’s proprietor and as such an extension of the Pension Regulator’s authority. Let us look at a case study.

Case study ; the diminishing room for trustees to exert conviction

I was recently told by a senior regulator that I was not acting in the interest of CDC by quoting the Government’s announcement , issued on 22nd October 2025 , that CDC can deliver up to 60% more than a DC pension. Is this considered a prudent position for trustees to take? The Government’s own impact statement backs up the statement with the studies of senor sources.

It is not just TPR who are whispering in the ear of those appointing trustees, it is the PRA a member of which argued with me about the number on social media.

There is very little that can be done but listen to the views of the trustees and if those views are influenced by regulators who take a position against the studies and the DWP, then trustees can control the promotion of their scheme and hide behind their duty to comply with a requirement not to promote the scheme.

The regulators could be influence by the PRA for all I know, but let’s not deny it , Government has spoken and for all the talk of fiduciary responsibility, Government is elected by us to be authoritative.

I am not sure whether a trustee would have allowed the Government to make this statement , if it had been pension trustee to the DWP!

How the room for trustees to exert conviction is diminished

To end on the lack of independence of trustees to act on the behalf of the members, let us remember that the majority of professional trustees not only have to comply with the regulator’s codes but to the house views of the firms of trustee’s that they sign up to. These trustees are often employees and if not they are required to attend meetings and read compliance documents to ensure that the house view is followed.

For a trustee to take a decision when controlled by the organisation they are part of , TPR that regulates them and the reality of getting paid, makes the exercise of personal conviction very hard.

Which is why I can see why my very senior friend’s view that trustees are no more than compliance officers has sense. But I stop here, although they must take advice, they have the choice of the advisers, have the right to fire them and get new ones in and though they have diminishing responsibility to assert the value of their scheme to its members , they have the right to listen to their members and act in their best interests.

I do not think we have heard the last of the independent trustee. Vidett (a thriving firm of professional trustees) , spoke at the Pension Age conference last week and found their argument for firms like theirs to take control of trusteeship ran into a storm of opposition from independent trustees in the room.

Which is why we should have member nominated trustees and trustees who choose to participate in commercial multi-employer schemes. In these schemes there is a third constriction of power for trustees which is that the commercial decisions of the provider of proprietor of the scheme is ultimate decision making on much of what trustees once chose themselves.

There is a new world for trustees to do good. Their capacity to exert conviction is much diminished but they can be more than compliance officers. We should  stand up for their independence at a time when it’s under massive challenge.

 

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Politicising pensions the way the conservatives have done is a disgrace

Posted on May 2, 2026 by henry tapper

This tells me a lot about the pensions of politics.

Add to the supporters of the Conservative shadow DWP SOS , I have read articles in The Times, The Sun and social media from Pensions UK praising he work, this is deeply offensive to those of us who have valued pensions as an apolitical zone.

There is a lot to thank the Pension Schemes Bill for but if I were to pick two items that are at the bottom of the list, VFM and the pensions dashboard which are what any conservative can claim they are theirs.

The really hard stuff which will change our pots to pensions are the default retirement income from DC pots and small pot consolidation.

Add to that sections on DB surpluses, reform of LGPS and a super push for superfunds and the Pension Schemes Bill really makes a difference to a lot of people.

Of course not every institution , nor every peer is conservative. But let’s be clear, this “nonsense” as Torsten Bell called it, shows we will now have very different pension landscape, one that is unwelcomely political.

Let’s remember who it is we voted in and who is responsible for the Pension Schemes Bill. I did not vote Labour but I respect they are our Government and am pleased that I was at this gig this week.

Great morning at @PensionsAge’s conference. A huge reform agenda is underway to build a pensions system today’s workers can trust to deliver them decent retirement. My confidence it can be done is bolstered by the consensus across the industry & clear enthusiasm to make it happen https://t.co/y9wzSao7wa

I will finish with an interesting interchange about my report on Bell’s “7 reasons to be pension perky” speech.

I will end this political article with what I feel is a touch of our pension minister’s flamboyance

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Is private equity helping us get financial advice when needed?

Posted on May 1, 2026 by henry tapper

Robin Powell makes a great point

I have these thoughts having read Robin’s article.

My comment is this. Financial advice is now becoming a matter for Private Equity with all their business models bring. We have seen Private Equity’s impact in other areas and it is rarely positive , rarely transparent and rarely operating for the end user – the customer. But Robin makes that point better than I can.

Who does your financial adviser really work for?

Robin Powell

Robin Powell

Journalist, producer and financial content marketing consultant

Private equity has been quietly buying up UK financial advice firms. Many of those buyers also own the funds your adviser recommends. Here’s what that means for your money.

The message from your financial adviser sounds routine. The firm has been taken over by a larger group. Same people, better backing, nothing to worry about. Most clients nod along and carry on.

Think instead about what happens when a GP surgery is bought by a private healthcare chain that also manufactures its own medicines. The doctor is still your doctor, same face, same consulting room. But the chain that now signs the payroll also profits when you’re prescribed its own branded products. The prescriptions may not change. The incentives, though, have shifted in ways you can’t see from the waiting room.

That same pattern has been playing out across UK financial advice, at speed and largely out of sight.

Has your adviser been taken over?

According to the NextWealth Consolidator and Aggregator Report 2025, 127 acquisition deals were announced in 2024. The number of advice firms fell by 8.1% in 2023 alone, and around half of all UK advisers now work in firms with more than 50 advisers.

What’s changed most sharply is who is doing the buying. Approximately 72% of deals in the first half of 2025 reportedly involved private equity, almost double the prior year’s share. These aren’t patient, long-term owners. Private equity firms typically invest with a five-to-seven-year exit horizon, which means the business needs to generate returns quickly enough to repay debt and reward investors before the next sale.

In June 2025, Lee Equity Partners, a US private equity firm, took a majority stake in Shackleton, a UK consolidator managing around £7bn in client assets. In February 2026, NatWest announced the acquisition of Evelyn Partners, bringing roughly £67bn in assets under management into the banking group. The ownership chains now stretch further and further from the client sitting across the desk.

What your adviser may not have mentioned

According to the NextWealth report, 84% of profiled consolidators run their own in-house Model Portfolio Services, and 68% have their own fund range. The firm that bought your adviser almost certainly has its own products to sell.

This is what the industry calls vertical integration: the same group owns the advice, the platform, and the investment product, capturing margin at every stage. It creates an incentive that didn’t exist when your adviser ran an independent practice, one pointing towards the group’s own products regardless of whether they’re the best option for you.

According to the SPIVA Europe Mid-Year 2025 Scorecard, 97% of sterling-denominated Global Equity funds underperformed their benchmark over the ten years to June 2025. That’s not a bad year or an unlucky run. It’s a decade of evidence. If your adviser is being nudged towards the parent company’s actively managed funds, history suggests those funds are more likely to cost you money than make you it.

The FCA confirmed the conflict isn’t theoretical. Its October 2025 multi-firm review found that “some groups offered explicit or implicit incentives to invest in group products or services, including investment products.”

The regulator’s verdict

In October 2024, the FCA wrote to advisers and intermediaries flagging consolidation as a specific concern and warning that debt-funded acquisitions needed credible, stress-tested repayment plans. A year later came the follow-through.

On 31 October 2025, the FCA published its multi-firm review of the sector. The findings were pointed. On debt: funding equity investments through debt “can weaken the financial resilience of regulated entities.” On conflicts: vertically integrated groups must “properly identify and manage the inherent conflicts.” The review also criticised firms for absorbing client books without properly examining past advice quality, potentially inheriting liabilities they hadn’t accounted for.

As of early 2026, the FCA has not issued a Final Notice against a major consolidator for post-Consumer Duty breaches. It’s still in the review-and-warn phase. The burden of staying informed falls on you.

When debt meets your savings

Acquiring advice firms costs money, and most of it is borrowed. Deal multiples have roughly doubled since 2021, from around 3–6 times EBITDA to as high as 6–12 times in recent transactions. Parts of the sector are already showing strain. True Potential reported a £243m operating loss in 2024, refinanced approximately £750m of debt, and set aside around £100m for client redress following an FCA Section 166 review.

Client investment assets are held separately from the advice firm’s balance sheet and carry regulatory protections. But a parent under financial pressure has less capacity to invest in service quality and, as the FCA noted, a structural temptation to move cash from the regulated business to meet group-level debt. The risk isn’t that your adviser’s firm disappears overnight. It’s that service slowly deteriorates, and you don’t notice until it matters.

Three questions worth asking now

First: who owns this firm, and who owns them? The FCA Financial Services Register lets you trace any firm’s ownership structure. If the chain leads to a private equity fund with no obvious UK presence, ask your adviser to explain who ultimately owns the business and what their investment horizon looks like. Vagueness is informative.

Second: are my investments in your parent company’s own funds? If yes, ask for written justification of why those funds represent better value than a comparable low-cost index alternative. Consumer Duty requires them to demonstrate fair value, and given that 97% of active global equity funds lag their benchmarks over a decade, it’s a reasonable question to push.

Third: has anything changed in how you’re paid since the acquisition? If your adviser now earns more for recommending in-house products than external ones, that’s a conflict worth understanding before acting on their next recommendation. Get any post-acquisition changes confirmed in writing.

If you’re uncomfortable with what you find, genuinely independent advisers do still exist. The Personal Finance Society directory and Unbiased are reasonable starting points. The FCA Register confirms whether an adviser operates on a fully independent or restricted basis.

The pharmacy may be stocked with house brands. The group may have borrowed heavily to buy the building. That knowledge doesn’t make you a cynic. It makes you an informed client, which is exactly what your adviser’s new owners are hoping you won’t be.

Firms structured differently do exist. Y TREE is one. No in-house products, no vertically integrated revenue chain, no private equity owner with a five-year exit clock. The entire business model rests on the advice being genuinely independent.

Robin Powell is an author, journalist and financial consumer advocate. He is also the editor of The Evidence-Based Investor.

If you’re wondering whether the conflicts described in this article actually show up in client returns, Y TREE has done the work.

Their 2026 Plugged Into Wealth Management report analysed more than 550 real portfolios across 110 providers, including many of the vertically integrated firms now consolidating the advice market.

The finding: 84% of wealth managers underperformed a simple passive benchmark.

The very structure this article describes isn’t just a theoretical risk. It’s already costing clients money.

You can read Robin’s analysis of the report here: https://shorturl.at/mE4MJ

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Visualising retirement with the Pension Dashboard (lessons from Denmark and R Smith!)

Posted on May 1, 2026 by henry tapper

 

 

There was an agreement in 2020 that the pension dashboard would publish details of people’s DC pots as “pensions” using SMPI numbers to offer people an Estimated Retirement Income (ERI).

Speaking with Richard Smith I got the impression that the expectation then was by 2026 we would be onto a second and third iteration of the pension dashboard. But we’re not and while the last 6 years have gone by, we have become more aware of pensions as income and caught up with the pension dashboard.

And now we are fascinated by the way that pensions increase. Look at the debate about the triple lock and how the state pension goes up each year. Many DB pensions increase with inflation, some with inflation that is capped at 2.5%, some capped at 5% and some go up at RPI and some by CPI (different measures of inflation). All of these increases are different from the ERI because the ERI presents the pension coming out of the pot as a level income.

This may seem unimportant but let me quote my chief actuary (Chris Bunford) who tells me that half of the pension that people get results from increases in revaluation of the pension by inflation before retirement and increases in pension in retirement.

What people when they see the dashboard will be pensions that are yet to start paying out. When they start paying out they drop off the pension dashboard as you’ve got a better way to monitor your pensions – your bank account!

But when comparing your various pensions before you retire you need a way to compare what these pensions will look like not just when you start drawing it but five, ten , fifteen years from that point.

This is Richard messaging me!

This is a problem that is huge with European dashboard as I was It took the Danes 20 years to get this this graphic design – I’m afraid I didn’t get to discuss inflation in the other four countries I visited

The increasing State Pension (purple) is shown flat, or increasing in real terms

They’ve struggled for years to get Danes to understand the long term impacts of inflation on pensions in payment

Europe

With all this stuff, I’ve learned you have to SEE it displayed to understand it (hence me going to the Continent and sharing all the screenshots on my blog) which I believe have partly influenced MaPS’s designs for the MHPD screens.

Oliver Morley spoke on the progress of the dashboard at the Pension Age Conference yesterday and was asked the question of how long it will be till we see the kind of information that is available in Denmark. It seems impossible for us to compare pensions properly unless we know what impact increases (or lack of them) will have on our futures,

If the Pensions Dashboard is to be more than just a way to search for lost pots then we need to offer people information that allows them to visualise their pensions.

 

 

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Union’s problems with “pension pots” can be solved by employers “listening to their people”- Torsten Bell

Posted on May 1, 2026 by henry tapper

 

I asked a question of the Pensions Minister yesterday. I had been asked to ask it by the Finance Director of a large employer (more than 20,000 staff) with most in a DC workplace pension. He told me that he was being “harassed” by workers who were being put up to it by his main union who thought he could do better with the promise of a wage in retirement.

We went on to discuss this in more detail. The Union is telling staff that the workplace pension is a lie and that there is no income from the pot people get at retirement. The FD didn’t question this but pointed out that he was quite capable of turning a pot into what he wanted -financial freedom and he didn’t see why his staff couldn’t do likewise.

It seems that the Union is also suggesting to staff that they can go back to getting pensions as they used to do when they could be in a DB pension. It turned out that the FD thought that what the Union were suggesting was DB and I explained that CDC is not DB – certainly not from the FD’s point of view and that for his P/L and Balance Sheet , paying a set amount into a CDC plan was no different to paying into the DC plan already in place.

But this was not enough for the FD and he said he’d like to have a word with the Pensions minister and ask him what he could do to counter the lies from the Unions that staff could have back their pension and a better pension than could be had from the DC pot and the lie that this wouldn’t cost the company any more. I do not kid you – he used the word “lie”.

I mentioned that the following week I would be going to see Torsten Bell and would ask him the question in front of 500 workers. We agreed that I could ask the question so the FD could have an answer to the Union and to his staff who were bringing the message to him.

Which is why I got to ask the first question to the Minister where I said that I was representing a big company who under pressure from its union was being asked to switch from DC to CDC. I went on to ask the Minister what he would say as an argument to the unions to save the FD having to pay more attention to his pension.

The answer from the Minister, after a bit of waffling was to advise me to “listen to the people” which seemed a fair enough way to avoid answering my question – what with 500 people in the room , most of whom know nothing about the problems of ordinary “working people”.

It is of course the right thing for the FD to do because the Union is not bringing him a problem but an answer to the problems workers have when they retire. They get a pot of money which does not pay a pension and the unions have clocked that a pension from CDC will pay as much as 60% more pension than a pot can. The Union calls the pot a mis-selling of a pension -that of course didn’t make sense to the FD but as a 64 year old with a big pot, I think the Union have a point. It is the nastiest hardest problem in finance (Bill Sharp) to turn a pot of money to a pension. It is a lie to say that a pot is a pension.

So I will go back to the FD next week and send him this blog today and I will explain that the Union is not going to ask him to pay more into pensions (unless its part of wage negotiations) and they will make it easy to transfer from DC to CDC (because a union did that for 120,000 members at the Royal Mail without fuss from the workers).

I can’t say that I am in a union or that I am on the board of a large company. But I can say that I intend to be offering a CDC scheme for employers who accept that CDC pays more deferred pay to staff than a DC pot can. I can promise support from union people both within my organisation and without. I can promise that the cost of moving from DC to CDC will be minimal (some operational cost at start).

So I hope that in time I and the FD will be friends, just as I and the Unions are beginning to be. Because this really isn’t the story of confrontation that the FD thinks it is and it’s not a struggle with an unreasonable man, that the Union members think it will be. It is something that we need support from Government to get over the line and difficult as it seems for a politician to speak his mind in front of 500 people, I think Torsten Bell did just that!

We should listen to the people – who want a pension and not a pot – when they get to retirement!

Union’s problems with “pension pots” can be solved by employers “listening to their people”- advice to me from Torsten Bell

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“Seven reasons to be pension perky!” from Torsten Bell

Posted on May 1, 2026 by henry tapper

Torsten Bell – Pension Minister

Speaking to a friend after the PA Conference yesterday I asked him how he found the Pension Minister’s speech earlier in the day. The reply was typical of my friends from the north west of England, it was blunt and from the heart.

“I have not taken a disliking of someone as quickly as I did Torsten Bell this morning”.

That was this plain speaking man’s verdict , on his first listening to our Pensions Minister.

I like Torsten Bell but can see my friend’s point of view. Yesterday he arrived, spoke for his allotted time, answered several questions , most in good political fashion and then pushed off. But it was hard to take the compliments he gave us seriously, as his cockiness ill-disguised the contempt he has for pensions and pension people.He was asked if he expected to be doing the pensions job as long as Webb and Opperman and he pretended to be humble saying that that was down to his bosses.

But no-one watching him could doubt that he does not see the trajectory of his career as down and out, the trajectory is up and now he has got the Pensions Bill over the light, the question is whether he can be bothered with the second half – the secondary legislation to fill the framework in.

Reasons ordinary people don’t think about pensions

He recognised the Pension Age and remarked that Pension Age was increasingly  a description of the British worker but also of what happens when you work in pensions. I felt aged working in pensions when this youngster poke fun at me and those around me – despite him being right! He had seven reasons for us to be perky (or cocky if you have a jaundiced view of Torsten).

We had the same homily for Britain’s resilience to the energy crisis, he talked oncer more about Labour Government’s commitment to renewable energy and its capacity to learn the lessons from previous crisis’. He reminded the audience that pensions are not on the nation’s mind, the cost of living is.

Seven reasons to be perky (about pensions)

Perky one; We have retirement. For the first time we expect to retire, the ordinary person will not work until he drops, The numbers of us getting to the state pension age and beyond is higher than it has been and retirement is a big change

Perky two; we’re over Thatcher’s damage to pensions; the pensioner poverty that returned in the 1990s was as a  result of the Thatcher determination to screw the state pension and individualise pensions. Thatcher’s damage has been undone since especially to the state pension which is now in better state.

Perky three; today’s workers will be tomorrow’s pensioners; Bell claimed that there have only been 2 years out of the last 100 when the rate of people out of work was lower than last year. The big change is women being in work, the growing worry is young people

Perky four; more of us will have a second pension;  auto-enrolment has been a success; this is still a reason to be perky

Perky five; pensions are in surplus and employers are no longer finding pensions a strain upon their cashflow. Deficits are rare in DB pensions, surpluses can be huge

Perky six; we are getting legislation with a purpose; encouraging productive investment , making the surpluses useful, improving the efficiency of LGPS, introducing guided retirement from DC, measuring DC with VFM, creating DC megafunds and allowing DB superfunds to get off the ground. Using what is fast becoming a cliche – he claimed the job was only half done.

Perky seven; we have another pension commission; this is an opportunity to scrap the endless reports on inclusion and adequacy and get something in place to tackle the problems, like the intractable problem of the self-employed’s pensions

What followed in questions was true to Torsten Bell’s reputation.

I asked the first question and will separately blog on  what I’m finding on CDC. My question was what can the pension minister say to an employer who is being pressurised by unions who say the workplace can increase by up to 60% by moving to CDC.  Bell was flustered, gabbled a bit and then finished by saying that employers should listen to worker representatives.

He was asked whether unfunded public pensions should be funded and he retorted to the question “do you want Government to pay more?” He pointed to statistics showing that the cost of public pensions was falling not rising,

The mighty Con Keating asked him whether the £3.5bn Bank of England pension scheme would start investing some of the money it has in defensive assets for growth in the economy in line with the Mansion House accord. The Minister gabbled something about morons trying to hold up the passing of the Bill with “lots of crap”. Con Keating got no answer but that financing growth is “a piece of piss” compared with getting infrastructure in place (an answer I got from the CIO of the PPF at the end of the conference.

Finally he was asked questions about benefits which he brushed away by saying that benefit payments are “totally flat” and that the questioner had been listening to more “nonsense”. People have been given too much incentive to prove they are ill.

At this point he admitted to being new to politics and that with this last question he’d broken the political rule and answered the question. He need not have reminded us of this “rule” as we’d had 20 minutes of answers that hardly addressed the questions.

I do like Torsten Bell’s speeches even though most people think he’s arrogant, cocky – choose your derogatory description. But he’s right. At a time when the Government is under pressure, we have seven reasons to be perky about pensions and I am happy to have captured what he said, even if I get some backlash from my Tory readers!

Thanks to Pension Age

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The PRA takes action on insurers shipping the proceeds of our pensions to Bermuda

Posted on April 30, 2026 by henry tapper

Well I’m glad that I’m not the only wolf howling at the moon.

Funded reinsurance transactions involving UK life insurers will face enhanced regulatory requirements under new proposals unveiled by the Prudential Regulation Authority (PRA).

So says Jonathan Stapleton in Professional Pensions and I’m no longer a lonely wolf!

The plans – set out in a consultation published today (29 April) – would see funded reinsurance being treated more like other investments that UK life insurers hold, ending what the watchdog said was “a regulatory inconsistency”.

The PRA said that, as a result of the new rules, UK life insurers using funded reinsurance will hold capital which better reflects the risks from the default of their reinsurance counterparty, particularly where the reinsurer has a lower credit rating or where they hold riskier collateral.

It said that, for the average funded reinsurance, firms currently hold capital worth 2-4% of the value of the annuity liabilities, compared to 11-15% for similar investments.

The PRA estimated that, under the latest proposals, the capital held for the average funded reinsurance transaction would shift to around 10% – a move it said would “materially address the inconsistency” while recognising there are some differences.

Jon Stapleton has the ear of the great and good (or a press release)Bank of England deputy governor for prudential regulation and PRA chief executive Sam Woods said:

“Funded reinsurance is growing rapidly and has the potential to undermine the resilience of insurers if not managed properly.

“Today’s proposals aim to iron out the discrepancy in the regulatory treatment for these deals, to protect pensioners and improve insurers’ incentives to invest directly in the UK economy.”

I couldn’t agree more, the insurers shipping our assets across the pond are taking advantage of laxer rules, investing in private credit and creating a problem for the annuities that pay pensioners their money.

Jon goes on, getting pretty close to howling at the moon himself!

In recent years, UK insurers have sold bulk purchase annuities (BPA) to defined benefit pension schemes. Under these transactions the insurer takes over full responsibility for paying members’ regular pensions for as long as needed.

The PRA said many UK life insurers in the BPA market are now increasingly using funded reinsurance, in which the UK life insurer pays a large up-front premium to an offshore reinsurance counterparty, who invests this in assets to fund future payments to the insurer. These assets do not need to be compatible with UK standards, while the offshore reinsurer still benefits from access to the UK insurance market.

The PRA estimates that current funded reinsurance exposure of UK firms is around £40bn, but this number is rising quickly, reflecting both BPA market growth and how the current treatment unduly favours funded reinsurance over other similar risks.

The PRA’s 2025 life insurance stress test showed this risk could in future have a meaningful impact on life insurers’ solvency positions if the use of funded reinsurance continues to grow.

The PRA said the proposals should reduce incentives for firms to choose funded reinsurance over other sources of capital, supporting future resilience and also driving more direct investment in its place, including investment in the UK economy.

It said the proposals would not apply to business already executed or completing shortly, but would apply to any business from 1 October onwards.

That’s being very kind to insurers in my opinion, if you’re being paid from a buy-in or buy-out of your pension, then your assets will have been on the slow ship with no returning!

Market impact

LCP said it the PRA was proactively focussing on an area it sees as a potential source of risk to insurer resilience, particularly against systemic risks.

Partner James Silber said:

“We expect the proposals to lead to a moderation in the use of funded reinsurance from October given the greater capital insurers will need to hold. Funded reinsurance is likely to remain a key part of the toolkit, potentially with changes to the structures and counterparties, but we also expect to see insurers diversify into alternative asset strategies to optimise pricing.

Partner Charlie Finch added:

“Last year we projected that over £350bn of assets will be transferred from pensions schemes to insurers over the next decade. Funded reinsurance has been a key tool used by insurers to support growth so these proposals have the potential to impact overall market capacity and pricing. However, it is a highly competitive market and the insurers have shown a consistent ability to re-optimise their strategies as circumstances change. Trustees are likely to want to scrutinise these changes when entering into buy-ins.”

This is very kind on insurers, I’d rather quote the PRA which in its consultation says

1.3 The PRA is concerned that continued growth in funded reinsurance exposures could lead to a rapid build-up of underestimated risks. This could impact the safety and soundness of UK insurers and policyholder protection and threaten the stability of the UK insurance industry. As illustrated in the 2025 Life Insurance Stress Test (LIST 2025), the recapture of funded reinsurance arrangements from just a single counterparty could have material adverse impacts on firms’ capital positions, even with the relatively small exposures on the books at YE24.

1.4 The risks associated with funded reinsurance have also been identified by international institutions such as the International Association of Insurance Supervisors (IAIS) and International Monetary Fund (IMF). Insurance regulators in the Netherlands and the US have also recently taken actions focused on insurers’ use of funded reinsurance-like arrangements

I reckon this report of the PRA should be considered a  feature of TAS 300 reports from today going forward; actuaries need not wait till October 1st 2026!

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It is a shame that mandation is needed for our pensions funds to invest in our country

Posted on April 30, 2026 by henry tapper

The FT are clear that the Government has won a victory over opposition to an aspect of its Pension Schemes Bill

Of course the campaign that Rachel Reeves was helping to launch last week went further than pensions but workplace pensions are the easiest way to get money invested in Britain.

Whether by “workplace pensions” we mean DC. CDC or DB plans, there is much that can be done and yesterday was a good day for DB workplace pensions with the PRA coming down hard on insurers shipping off our pensions to be invested in America via reinsurance treaties mostly written in Bermuda.

I met an old friend who is now at the Bank of England but who I last saw on Lady Lucy eight years ago. She congratulated me for our work in setting up a CDC , reminding me that I was part of a movement to invest more of people’s money in growth (and that we’d be mindful of the Mansion House Accord – we will).

It is not enough to say that workplace pensions are one or other , they are a class of pensions that cover almost all employers in the private sector and a few in the public (LGPS being the best known).

The FT are well known , through Jo Cumbo, for dissent against mandation. I like Jo as I like Ros Altmann and John Hamilton who have all stood out against Government interference in what they see as a fiduciary process. I see trustees having a lot of codes to follow and this is simply an extension. I am glad that the FT have less ferocious opposition though I sense they have some unease. Test for yourself…

Chancellor Rachel Reeves on Tuesday finally won her battle with the House of Lords over legislation that will give ministers the power to force pension funds to invest a minimum amount in UK companies and private assets.

But parliament’s upper chamber agreed to approve the pension schemes bill only after ministers made a series of last-minute concessions that put safeguards around any use of the controversial “mandation” power.

Reeves insisted that ministers be given a “backstop” power to ensure that pension funds comply with a voluntary accord to put billions of pounds of extra investment into the UK economy.

We of course see this Pensions Schemes Bill as the Pension Minister’s but that won’t be the way it’s seen by those outside our bubble. For the FT the capacity of pension schemes to reflate our economy is a Treasury matter and driven by the Chancellor. We have for the first time since Osborne and Webb, a pensions minister who speaks as if he were a Chancellor the two ministers have been as one on this.

There have been concessions as the opposition played ping pong with the Pension Schemes Bill to the final evening of this parliamentary session. Had this agreement (some would say “fudge” not been agree this week, we would not have a bill or an act on pensions. Here are the fudges listed by Alan Livsey and George Parker

Bell said the mandation power would now be “capped, time-limited . . . and subject to a savers’ interest test that has been materially strengthened”.

The contentious power would expire via a so-called sunset clause in 2032, while pension funds would be able to appeal if they felt ministers were telling them to invest in a way that was “likely not to be in the best interests of [scheme] members”,

Bell added. One new concession will require regulators to make an assessment of any ministerial direction to pension funds and that ministers will have to take account of their judgments.

Bell had already issued a clause to prevent ministers from mandating investment in any particular asset class.

In another compromise, pension funds will be able to use investment companies as a way to access their target assets such as infrastructure and private equity.

I must perform ocular gymnastics over the Lords, one eye is cast down in indignation that they used coercion to get unnecessary concessions, in another I raise my eyes to the Upper House for clearing investment companies to be included. I will pick out Sharon Bowles and Ros Altman for the latter and Bryn Davies for keeping us sane in the past few days.

In conclusion, I did not think we needed this row which seems more political than practical. I am not going to stand on principal – especially fiduciary principles .

The argument over mandation will linger; I dare say some of this Government’s opposition will promise to abolish it in their next  manifestos;  but I doubt it. This really was a storm in a teacup.

 

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TPR has a bible to get and keep a CDC scheme authorised.

Posted on April 30, 2026 by henry tapper

The Code of Practice for CDC is our bible!

I will strain my blog to deliver something that is very serious and meaningful to the DWP, TPR and the few people set upon getting authorised to run a CDC from next year. I liken this document to the bible – maybe to Leviticus, that lays down what can and cannot be done to stay on the right side of the deity.

There are 153 pages of the CDC code or practice laid before parliament by the Pensions Regulator.

It is a bible for finance, marketing, administrators, governors, funders and the proprietors of a multi employer (UMES) workplace pension scheme. I cannot pretend to be expert in all or any of these sections, but I promise myself, my team and the Pension Regulator that I will read every page and ask questions of my colleagues and the Pension Regulator what I or we do not understand.

In answer to the question “how can you get a CDC scheme authorised, the answer is to read the bible and follow what it says. The bible is known as the code of practice and though not following the code may not be  criminal ,  it leads a CDC proprietor to a dark place of sin!

Is this code an advancement on what TPR consulted on?

The last version was responded to by 29 firms. We consulted through the company of our actuaries and consultants, Goddard Perry. This is what TPR concluded from reading these responses and it is now for us to read the new code and comment on the changes (a hard job to compare but I’m sure that AI will help us!)

Here is what TPR are saying to all organisations looking to be authorised and those who will advise them .

We have taken on board the feedback received and acknowledge that there is some nervousness about trustees going further than just providing factual information about the scheme. This is a new area of regulation for us, and for occupational pension schemes. We are committed to a pragmatic regulatory approach which will be informed by and evolve with developments in the market. We will also publish some standalone guidance later this year which will look at addressing some of the concerns raised. We will keep this guidance under review as the market, and our experience of it, develops.

There are a few areas where we have tightened up some of the wording in the code to make it easier to understand. For example, we have expanded the definition of an inducement, so it captures all pension schemes to future proof it as much as possible. We have also tightened up the wording from the Financial Conduct Authority (FCA) test on whether an item is defined as a promotion, which several respondents asked for clarification on.

We also note that several respondents asked for clarity around the respective responsibilities of trustees and scheme proprietors when it comes to promotion or marketing. As the trustees are prohibited from undertaking any of these activities, the responsibility would sit with the scheme proprietor and/or any other person they have delegated this responsibility to. Trustees have an important role in challenging key promotional materials if they believe they are unclear or misleading, or both. On the rare occasion trustees may not have identified issues, we do reserve the right to also take action against them.

Finally, some respondents questioned the use of the wording ‘member detriment’ as marketing and promotion is only aimed at employers. Whilst this is true, schemes should recognise that ultimately any misrepresentation of scheme benefits will impact the member. Trustees have a fiduciary duty to act in the best interests of members, and we believe therefore the wording is correct and will remain as is.

The Code itself and how to get to it.

I have put our “bible” iitself at the bottom of the page, protected by a disclaimer which you must accept to see the bible itself.  Alternatively  you can click this link. 

I may be one of the few people to read it and I do so because Pensions Mutual , of which I am a founder, would like to be authorised and supervised by the code. Of course , all the team will read it to and we will consult with TPR in person , on the web and in writing.

I take as a sample of the Code of Practice a description of what must go into an application for authorisation. It is at the front of the code and is followed by details of the changing requirements of those running multi-employment schemes.

These have changed once and will change again, we are told that there will be a final version (for now) in October but there will be more, when we have a Retirement CDC and maybe beyond that a Code for accepting individuals wanting to swap pot for pension.

But for now , the code is not for individuals, it is not retail. It is onerous and shows the level of regulation we, in this country, require of our pension schemes. I think the code of practice is a small price to pay for getting paid for securing pensions for what we expect to be more than a million people in some schemes.

Here is a sample of the Code as it stands; this relates to the getting authorised and is one question to that asked in the title of this blog.  But behind it are the details that need to be complied with – a further 150 pages.

For multi-employer CDC schemes only, the following must also be included with the application

6:a. The scheme’s business plan.
b. The scheme’s latest accounts (if any).
c. The scheme proprietor’s latest accounts (if any).
d. The latest accounts of any undertaking (other than an unincorporated association)
that partly or completely funds the scheme proprietor.
e. A statement signed by the trustees of the scheme confirming that the scheme has
a single scheme proprietor that meets the requirements set out in section 14C of
the Pension Schemes Act 2021.
f. A statement signed by the trustees of the scheme confirming that no trustee
promotes or markets the scheme or acts as the chief financial offer of the scheme.

7. If there has been no promotion or marketing of the scheme and there is no intention to do any in the future, a statement must be provided, signed by the scheme proprietor,
that confirms this fact and explains how and why this is the case.7

8. If there has been, or is intended to be, marketing and promotion of the scheme you
must include:
a. details of any promotion or marketing of the scheme
b. details of the matters set out in Part 1 of Schedule 1C to the Pension Schemes Act
2021 (no promotion or marketing that is unclear or misleading)
c. details of the matters set out in Part 2 of Schedule 1C to the Pension Schemes
Act 2021 (promotion or marketing: systems and processes), including details
of the systems and processes used, or intended to be used, for the purposes and promotion of the scheme.

Below is the code itself, access to this holy bible can be attained by clicking at the bottom of the box you see before you.

 

Whether you have read this far out of pleasure or regulatory interest, I hope it gives a view of what the Pensions Regulator’s Code of Practice will do for CDC. CDC is the better for it , though it is expensive to comply to and will stop many aspirant schemes from opening doors.

To its Proprietor, running a  CDC scheme is a  serious commitment.  It needs a bible to set out and as it carries on. It is  good that the Code of Practice for CDC is a well written  and consistent  bible.

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