Do you want to choose or be given a pension? A CDC debate on choice

Posted on January 27, 2026 by henry tapper

Let’s not pretend the future choices for employers are going to be easy, they won’t be.

Since 2012 we’ve made saving for retirement as easy as possible by defaulting staff into default funds of pensions we’ve mostly chosen on the basis that the provider will make it  easy.

But we have been stacking up problems and now those problems are coming home to roost. People are arriving at retirement with substantial pots and not a clue how to turn pots to pension.

Our problem has been kicked down the street like an empty can of baked beans – the pension problem. In this meeting of the Pension PlayPen coffee “mourners” we discuss whether we should wait another few years and hope that retirement CDC will be ok some time at the back of 2028.

Alternatively, we can set about getting workplace pensions back to creating pensions from as early as the end of this year using multi-employer master trust structures known as UMES (don’t ask me what that stands for)!

Here’s the video

We need to consider how people get pensions paid to them. Do they need to make choices or do they want choices taken for them by employers. Do employers want to give their staff choices or do they want to use a pension scheme to make those choices  for them.

 

Posted in pensions | Tagged , , , | 1 Comment

No one should be surprised that there’s a ferocious battle between Reform and LGPS

Posted on January 27, 2026 by henry tapper

This battle has been going on since Reform won control of Local Government around the country and has set about prioritising the needs of council tax payers above the prudence of pension officers.

This is how the FT report the situation

Posted in pensions | Tagged , , , | Leave a comment

Why wait for CDC? Bright sparks argue it out this morning !

Posted on January 27, 2026 by henry tapper

Coffee Morning – CDC – Why wait? 

Attending CPD included

Join here:   Tuesday 27th January at 10.30pm (that’s today!)

You are cordially invited to attend our next online “Roundtable” – CDC Why Wait?

The Government’s press release says that CDC schemes could increase retirement incomes by as much as 60%.

If you were offered a 60% pay rise, would you ask to have it deferred till 2029?

The master trusts assume employers will wait for Retirement CDC but there are several employers who want to go ahead as soon as possible. Why?

The Government’s (up to) 60% better pension is based on saving for the whole of your working life into a CDC plan. The figure’s worked out by clever actuaries from top consultancies who reckon the pay rise reduces to.

Hymans Robertson see the pay rise coming down a lot if you wait till retirement to transfer your pension “pot

“Retirement CDC has the potential to deliver between 25% and 50% higher income in retirement than a DC member purchasing an annuity or following a drawdown strategy”.

That’s Paul Waters telling us (check the link).  That’s a lot less than the 60% prediction for the whole of life (using the same defined contribution

There are also issues with timing when transferring DC pots into a CDC pension.

Pressure from unions and other employer representatives is building for action!

At this week’s session, the usual CDC enthusiasts  Henry Tapper and Chris Bunford will be  joined by recent converts Tom McPhail & Bobby Riddaway.

And we’ve had questions over the week about whether we should be targeting high levels of indexation on pensions in payment or stick with the required target of CPI. My favorite elderly actuary suggested that we might target CPI – 1% but that’s not in the rules. The odd thing is that the vast majority of annuities purchased are level so deteriorate in real value over the years they are in payment.

I’ve hear it argued that if we were to offer less than CPI , we would be risking too much too early with the possibility that we might in bad years have to pay less than the previous year’s pension. There are people who want pensions to be paid at CPI +1% or even more. What do you think?

A further question’s come in over whether pricing of pensions should include a pension to a dependent (even if we don’t have one) . Some argue that  people should have  to opt out of a dependent’s pension to avoid paying for others to leave theirs. Some argue that people ought to opt in so that the pension offered while you are alive is as high as it can be. What do you think?

Over 50 people attended our last CDC event, let’s see us building on that number today on 27th January at 10.30am

Join: https://teams.microsoft.com/meet/37687312973044?p=b3sV9Nu29vHzXF2AfR

See you there.

 

Join: https://teams.microsoft.com/meet/37687312973044?p=b3sV9Nu29vHzXF2AfR

CDC is much loved all around the world!

Posted in pensions | Tagged , , , , , | Leave a comment

Dashboards yes! May Richard Smith get his debate , can we get freedom from pots!

Posted on January 27, 2026 by henry tapper

I am a fan of Richard Smith and all he is doing to help people get back control of their financial lives using dashboards. Like me he believes that pensions should be laid out as pensions not pots and I feel exasperated for him that he spent yesterday listening to what was irrelevant to his central belief  which he expounded in his talk promoted above and available from this link.

Richard Smith found himself for four hours listening to the Lords debating asset allocation in what was for him an interminable debate that did not end as it ate the first debate on the DC aspects of the Pension Schemes Debate.

He wants to get to the debate on Guided Retirement on how to spend your DC pot but he’s going to have to come back on February 3rd.

And a frustrated Richard Smith explains why he wants people to get to grips with their finances (presumably with the help of the pension dashboard). Using the dashboard to get the full picture I agree with. (I assume MHPD stands for MoneyHelper Pension Dashboard).

But there is a school of thought that would have us speak with an extension of MoneyHelper before making decisions. This was the idea behind “Guaranteed Advice” offered by George Osborne in his 2014 Budget speech to ensure we knew how to deal with Pension Freedoms. It hasn’t worked, the FCA’s work on decisions being taken at retirement show we are making a total mess of pensions. I reported on this in May last year and you can read the 2024 Financial Lives (pensions) Survey and my comments here.

To me this cock up we are making on pensions, just gives gist to the argument that people should be paid default pensions unless they opt out for pension freedom. I suppose that over time the simplicity and effectiveness of CDC will win through and that progressive employers will not wait till the end of this decade to get involved.

Guided Retirement is an aspirational policy that simply can’t be fulfilled unless we invest the money that is needed to pay people pension. If we can get 60% more from going collective, we should concentrate on delivering that (in CDC) not waiting for the Lords to opine on engagement and choice.

I’m in my 42nd of year advising on pensions and I have never been clearer, pensions need to be paid to people , choices need to be kept to a minimum and they need to be laid out in a way that people understand.

Do we want to opt out of having a pension paid to the person financially dependent on us if we die first?

Do we want to delay or bring forward the pension being paid to us?

Do we want to opt out of pensions for a pot that gives us pension freedom ?

These are legitimate questions. But to suppose that we must be guided to an outcome that most suits us is to assume that we are all wanting different things. Most people see a pension as something that is paid to them to replace payment from their work and if it is insufficient for their aspired lifestyle it must pay a part of their work.

Here’s Richard’s post before he made his way to the debate (that didn’t quite happen).

I hope that on Feb 3rd ( a week today) , Richard will get what he wants and a ratification of the MoneyHelper Pension Dashboard. I hope he does not get another debate on pension freedoms and the need for ordinary people to consider their pensions as pots of wealth.

 

Posted in pensions | Tagged , , | Leave a comment

Starmer ignores Property Fund “pension bleating” and overrules Rachel Reeves to cap ground rents

Posted on January 27, 2026 by henry tapper

The FT’s story can be read here.

This blog, led by Harry Scoffin lamented the washing up of Michael Gove’s bill but praised the Labour party for picking up the baton that had been dropped.

This blog, fuelled by research by Free Leasehold and backed by a volte face by Pensions UK and bravely by Railpen leader John Chilman on this blog

THIS BLOG IS AN EXTENDED STATEMENT FROM FREE LEASEHOLDERS

Harry Scoffin has every right to feel proud of himself

I have not been taken out by the property cartels.

Not yet, anyway!

Thank you to our supporters, including those who have recently joined us from Zack Polanski, who has been giving Labour hell over its backsliding on promises to leaseholders.

The Circular is usually a weekly affair, but you have not had any in 2026. Sorry.

At the height of the fighting, it has been difficult to maintain our usual rhythm.

Anyway, expect a full update later this week, bringing you up to speed with what we have been up to so far this year.

When most of you read this email, the government will already have made its announcement ahead of markets opening.
DONATE TO HELP HARRY ABOLISH LEASEHOLD

What we will say for now is this: we will be the only group in this space actively opposing any freeze or £250 cap on ground rents.We are not interested in crumbs from the table or in playing insider games.

In opposition, Labour pushed to set ground rents to peppercorn, meaning zero financial value.If we are paying for nothing, we should be paying nothing. Labour has a colossal majority to deliver for the people.Peppercorning will also drain the value of overpriced freeholds, which is essential for a mass shift to commonhold

.Please see our statement below, which was first posted on X/Twitter alongside an interview I gave to LBC’s Matthew Wright at the crack of dawn on Saturday.
HOMES ARE FOR PEOPLE, NOT CORPORATIONS
WATCH HARRY WITH MATTHEW WRIGHT

GROUND RENTS: A STATEMENT FROM FREE LEASEHOLDERS
26/1/25

At the last general election, 9.7 million people voted for “change”.

In the manifesto, Labour promised to “act where the Conservatives have failed and finally bring the feudal leasehold system to an end”.

In the months building up to the election, Matthew Pennycook told Parliament that the Tories needed to be “courageous” and that he supported slashing money-for-nothing ground rents to a peppercorn, meaning zero financial value.

Pennycook, Angela Rayner and Sadiq Khan rightly rounded on the Tory government for dropping its plans for immediate peppercorning.

Let’s be clear, freezing ground rents or even capping them at £250 per annum keeps leasehold on life support.

It would be the opposite of ENDING leasehold, which is what the Labour manifesto promised.

If Labour announces a freeze or cap tomorrow, they will be betraying hardworking leaseholders to protect the ground rent grifters and offshore property mafia.

In fact, a freeze or straight £250 cap would be WORSE than what we going to get under the Tories had Rishi Sunak not called an early election.

Sunak sided with Michael Gove against the Treasury and the freeholder lobby by agreeing to a £250 cap with a phaseout to peppercorn over time. This policy featured in the 2024 Conservative manifesto.

The political economy of housing is changing.

Even Donald Trump has told these murky investors to stay out of people’s homes.

This May, local elections will be taking place across the country, including in London, where there is a super high proportion of leaseholders.

No wonder disruptors like Zack Polanski and Nigel Farage are licking their lips at a government servile to wealth-destroying corporates and captured by weird ECHR legalism.

Homes are for people, not corporations.
Posted in pensions | 1 Comment

John Roe , coffee and fund management – I share his views

Posted on January 26, 2026 by henry tapper

Value for money? I think we have the same thoughts – John Roe.

Sorry to use an Aldi packet – it doesn’t quite make the grade for the best breed of coffee drinkers , but this is what I’m drinking today!

Main factors to be considered by Tapper-Eastwood purchasing team

  1. Price – for comparables – Aldi is cheapest
  2. Information – this is from Columbia and it is smooth, tastes of caramel and is dark.
  3. Strength – it is strength 3 out of 8 (I think)

I agree with you , this is not telling me what kind of caffeine buzz I get – it should. Going back to drug-using student days I had much the same problem and for much of the time in between I used Red Bull.

Now on to the pension comparison. I know a lot about what you do as you have managed my money; I think I made a good decision f and you have invested in my company – AgeWage – which I am endeavouring to make a good decision so I can have a long and easy retirement.

Whether it be coffee or fund management I want to know what I’m buying , what it is aiming to do and what it’s costing me!

On that last point, I save a fortune by drinking my coffee at home and buying through Aldi, I suspect I feel the same way about fund management – except I can substitute workplace for home!

John Roe

Posted in pensions | Tagged , , | 1 Comment

Tom McPhail gives good advice to those who want a rich retirement

Posted on January 26, 2026 by henry tapper
author-image

Don’t trust the state if you want a rich retirement

Research your options, pay for advice and prepare well for later life

Tom McPhail
The Times

What do you want from your pension when you come to start drawing on it? This is not a simple question. I’m not talking here about guaranteed defined benefit pensions. such as final salary schemes, but the defined contribution “pots of money” pensions on which many of us increasingly have to rely.

At retirement a host of variables can have a bearing on what you might choose to do with your savings. These include your health, your attitude to investment risk, your home ownership status, your non-pension savings, whether you’re stopping work abruptly or going part-time, your marital situation and those same factors for your partner, and so on. Recent changes to pension death taxes have further complicated the picture.

You could just take all your pension out in cash, although you may pay quite a lot of unnecessary tax if you do; you could use it to buy an annuity; or you could keep the money invested in your pension and draw down a regular income. You could, as many people do, use a combination of all three. Everyone needs to decide what is going to work best for them.

This challenge is in sharp contrast to the situation at the start of your working life, when a one-size-fits-all approach can work quite well. The auto-enrolment scheme can get millions into pensions, but it can’t get them out.

Before 2015 most of those approaching retirement had to use their pot to buy an annuity, which had the merit of simplicity but also meant shockingly poor value for money for millions of savers. George Osborne ripped up those rules in his budget of 2014.

He gave us freedom to choose how to use our own money but also left many struggling to decide what to do. Whatever choices you make require trade-offs against the uncertainties of how long you will live, future investment returns and increases in the cost of living.

Now the government has decided that this is all a bit too complicated for us to deal with. We already have a retirement guidance service called Pension Wise, which is free to use (funded by a levy on all pension savers) but apparently this isn’t enough. Under new legislation on its way through parliament, pension schemes will be required to set up a default retirement policy. This means that within a couple of years, if you don’t make an active choice over how to draw on your pension savings, your pension scheme will be obliged to make it for you and start paying you an income.

This is a terrible idea. Your pension scheme can only guess at a solution for you. Without information about all those personal variables affecting your circumstances, it can only deliver a homogenous “least worst” answer. It will be designed to minimise the risk of causing you any financial harm, or incurring the pension scheme any legal liabilities.

This is a failure of financial regulation. For ten years now, financial firms have been trying to guide customers through the retirement decision-making process. They have been hamstrung by the stifling hand of regulators that have been far more concerned with preventing a few bad outcomes, than facilitating many good ones.

My advice is, don’t leave it to chance, take the time to research your options at least a few years before you expect to draw on your pensions. Pay for advice if you think you need to, it will almost certainly be worth it; there are also some good guided planning tools out there, in spite of the best efforts of the regulators.

Tom McPhail is a pensions commentator with 20 years’ experience across the industry

Posted in pensions | 2 Comments

Revival of pension investment as pension buyout deals slow.

Posted on January 26, 2026 by henry tapper

The FT kick off the week reporting something that you’ve been reading on this blog and in the pension trade press, the flow of pensions to insurance annuities is slowing as the size of buy-ins and buy-outs slows. Thanks Mary McDougall and Lee Harris for this; (free link for early birds).

The FT make the slowdown political and indeed a section of the Pension Schemes Bill (debated last week in the House of Lords) will make it easier for sponsors of DB schemes for pensioners in the private sector to get at surpluses.

Insurers bought up about £40bn of assets through pension “buyout” deals completed last year, according to preliminary estimates from consultancies LCP and Mercer, down from £48bn in 2024 and £49bn in 2023.

The FT report results from Just and Aviva. both of whom are below expectations. Big deals such as Ford’s £4.6bn buy-in with L&G are few and far between.

FT reports the increasing ownership of American private equity houses in what were UK insurers. These include PIC, Just and Utmost, all of which have found the capital needed to do the trades abroad, often reverting to funded reinsurance in Bermuda.

While the insurers say guns are lined up for a demolition of investment in DB schemes in 2026, we heard them say much the same in previous years and despite DB schemes being in a financial position to sell up, the FT report a different mood

But some trustees are now rethinking whether to sell their defined-benefit schemes, considering whether they can instead retain them and share more surplus assets with members and their employers.

What has not happened as we might have expected back in 2018 when a Conservative Government announced Superfunds is deals with superfunds. What we have got by way of superfund so far is the “bridge to buy-out” model pioneered by Clara. Whether this is considered a clean break with insurance is doubtful.

So far the only financial transaction that has happened to ensure the future of DB pensions in “run-on” has been the Aberdeen/Stagecoach Pension Scheme transfer.

Companies are also looking closely at a deal made by Stagecoach with Aberdeen last year where the asset manager took over as the “sponsoring employer” of the bus company’s scheme, with the aim of growing the surplus and sharing it with members of the pension scheme.

That is not to say that large companies are not renewing their conviction to run on pension schemes that many thought were in the past. With the new conviction that pensions can be a source of capital for sponsors is an increasing feeling that pensions can be deferred pay for staff and not just those in DB. There are many companies, larger and smaller, looking at the failure of the private pension sector to deliver pensions this century.

For them the DB era where pensions are guaranteed is not returnable to for future accrual. But CDC represents a type of pension at a fixed cost to employers that many are looking at as a replacement to the pensions they gave up when DB schemes closed.

I am pleased that FTs insurance and pension reporters are writing an article together that questions what a couple of years back was taken as fact; annuities are no longer being seen as the gold-plated solution for sponsors and members of private sector DB plans.

This blog has been saying for some time that when Britain decides to grow its economy again, the revival of pensions will be very evident.

Posted in pensions | Tagged , , , , , | 3 Comments

Pensions, politics and football

Posted on January 26, 2026 by henry tapper

Maybe in other countries ….

The weekend was a battle between the north west and the south east in politics and football and I’m pleased to report no battling in pensions.

Well done Bournemouth , well done my actuarial friend from Southbourne who put some cash on Bournemouth and Boscombe to win at 90 minutes (9-1 win with the last kick made it 3-2 to Boscombe.

Well done Manchester United for doing the same and winning 3-2 in north London’s Emirate Statement.

I suspect the football analogy for politics was that the Labour parliamentary party in London won 8-1 its fight against Andy Burnham who stays manager in Manchester . We await a home repeat where Manchester’s manager will get the footballing equivalent of management of the national team, but that will be some time off.

What can I say about pensions? Well my Manchester pension friends are split red and blue in football and I have friends supporting Arsenal and Bournemouth. My top pension politician is yet to declare her hand!

A downtrodden red , at last she can cheer on Man Utd. As the instigator of the Royal Mail CDC revival, she is something of a hero to me – though she’s out of pension politics. She’s the Social Democratic Party and she must have had a fun week with politics.

As you can see, we have a few things in common. I wish her well!

Indeed I wish the kind of football her side under a manager who looks at home in Old Trafford are playing – well. I have time for Arsenal and Liverpool who had a rubbish weekend and I ask you to pity me for getting some of the way to Woking to watch Yeovil Town have its match called off.

Has pensions got anything to worry about politics. I hope not. Hilary Salt’s Royal Mail CDC is not quite the CDC that’s emerging for multi-employer in an actuarial sense but in terms of what it does for ordinary people it is quite the same. CDC is an uplift in value for our pension money in terms of income in retirement.

We cannot hear a distant rumble against CDC pensions from Reform – though Reform thinks it can have a go at LGPS wastefulness. The Conservative party aren’t making much noise against the Pension Schemes Bill (except for fear of mandation in investment). The senior remaining pension politician in parliament is Ros Altmann and she is close enough to Bryn Davies , Sharon Bowles and Baroness Sherlock for me to say that there is no acrimony in pensions.

Whether there is any trouble in the Treasury for Reeves I doubt, there doesn’t seem to be any acrimony against our Torsten Bell in either DWP or Treasury (I hear nothing). Sensibly these politicians aren’t waving around football scarves (Starmer wears an Arsenal scarf and look at the problems that brings!).

Ros Altmann supports Tottenham but she represents a section of the population that I’m very fond of, (and who are better at most things than football).

So we kick off another good week. I am excited enough about pensions to be chairing another CDC session on Tuesday at 10.30 am. The link is below.

I am full of vigour having chatted over the weekend with my old friend Kim Gubler who’s Podcast with Nico and Darren can be accessed here.  We are only a couple of weeks from Valentines and we have Ronnie and Claire to ring that in.

Ronnie and Claire

My hope is that we see the Pension Schemes Bill inch towards being a Pension Schemes Act and that we can look to 2027 for proper pensions instead of DC pension freedoms, for those who can’t bet their head around freedoms. I hope that we get the UMES CDC consultation completed and movement on the regulation of multi-employer whole of life CDC in time for launch at the end of July.

I hope that our Pension Minister is thinking about what he’ll be saying at Edinburgh’s Investment Conference (top of the Scottish football league and pensions league!).

CDC – should we stay or should we go?

https://teams.microsoft.com/meet/37687312973044?p=b3sV9Nu29vHzXF2AfR

10.30 am Tuesday; see you from this link and post the URL into your diary.

Posted in pensions | Tagged , , , , , | Leave a comment

An amorous podcast with Kim Gubler’s Ronnie and Claire

Posted on January 25, 2026 by henry tapper

Kim Gubler

It is rather fun to have Kim Gubler on Darren and Nico’s podcast this week. Kim Gubler Consultants has sold itself to IGG in a deal which Kim says ensures its independence but gives itself access to IGG’s private equity squillions. Having known Andrew Bradshaw a few years I’d like to congratulate Kim and associates.

The stand out star of this podcast is the one legged pigeon known as Ronnie, who – being of a certain age – has fallen in love with Claire the lady pigeon and is seen on the podcast (matching keeping your independence to IGG).

The stand out discussion point is the discussion of value for money, at least as it is developing as a response to the FCA/TPR proposal. The lads and the lady are of the opinion that leaving it up to DC schemes to provide employers let alone with members with information about the performance of their pension plans (and whether that is valuable relative to what can be got elsewhere ) is going to be ready around 2050.

Commendably, Kim points out that if they bypassed the actuarial mysteries and simply used the data that schemes carry on money in (when and how much) and money out (value at the day of of analysis) we could have a consistent system of evaluation that could be available today. This line would have worked had she not mentioned that it is the system that has been delivered by Henry Tapper’s AgeWage.

It has been 140 sessions that I last appeared on this podcast and I don’t see myself appearing on the pod much before 2050.

But back to Kim Gubler and what is a really most excellent 72 minutes.

Kim and I have had many happy trips to horsey events and I started working with her when she led the Bacon & Woodrow DC research team in the early years of the century. She has a collection of acronyms that she had directed but I think PASA, Smart Master Trust and the are her current priorities.

She points out that the small pots program which has spent a decade going nowhere has been given new momentum by her work with Maurice Tetley.

It’s great to hear Kim, determined to get back to work at the end of this splendid session. I can’t remember 72 minutes worth of this podcast which has been so dedicated to the subject it is about. As I finished my listening, I had a variety of birds waiting out on our patio feeders including a woodpecker , a bird after which Kim’s offices are named. I am sure they had been attracted to my feeders by the story of Ronnie and Claire.

Ronnie and Claire?

Posted in pensions | Tagged , , , , , , | Leave a comment