A CFO/Trustee on buying private assets to pay pensions – 10.30 am today

Posted on May 26, 2026 by henry tapper

Christos is CFO of AEON Energy

This looks like a lot of fun today (Tuesday 26th) at 10.30 am. Over the weekend I’ve had a lot of fun reading my way through Christos’ comparison of CDC and DC. It’s long and detailed and at time very difficult but it will be good reading either before or after this morning’s Pension PlayPen Coffee Morning. You can read it from this link.

The 10.30 session will be hosted by Chris Bunford and me so be sure it will be a strenuous debate ;  Christos, the trustee CFO, leading it, is someone we have met before, an excellent mind and communicator.

Ok, I know – it’s not a Bill, it’s an Act and if you don’t like mandatory allocation to private and UK assets , there’s not much that you can do but wait until a Conservative Government gets elected and remembers to change the law.

Christos Christou looks a smart chap and will be pleased to know that many power companies are considering CDC after education from their unions! That gives even greater opportunity for investment in the kind of assets he’s interested in.

and he’s got quite a CV!

Here is that CV highlighting he’s a powerful chap!

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L&G – “Who could eat the pensions it’s buying out?” – (Gordon Aitken and TSCS).

Posted on May 26, 2026 by henry tapper

This blog looks at analysis of TSCS which explains the implications of UK insurers being sold to American financiers. But more important is the recent loss of Standard Life’s independence and the likely sale of L&G to an American predator.

Gordon Aitken’s analysis is far in advance to anything you will find in the mainstream press.  It, like TSCW, asks about who will “eat the pension”. What do you think?

I know this seems far fetched but there are other analysts who see the threats to  pensions and member’s security of being eaten by insurers who are just fronts for Bermuda reinsurance.

This from Equity Managers TSCS

Accountability can be found in this document

When a private equity fund raises money, the money has a clock on it. Ten years, maybe twelve, then the fund must return capital to its investors. That clock is a constraint. It forces discipline, and discipline costs return.

Life insurance liabilities have no clock. When a 62-year-old retired teacher buys a fixed annuity, that money sits on the balance sheet for the rest of her life and often longer. It cannot be recalled at the discretion of an investor. It cannot be redeemed because of a bad quarter. McKinsey, in the report that launched a thousand acquisitions, called it “an enticing form of permanent capital.”

Notice what it doesn’t say. It does not say “permanently safe.” It does not say “permanently the policyholder’s.” It says permanent capital, and the capital it is describing is the teacher’s. Her money is the permanent thing. The safety she was sold is not.

This piece is about the distance between those two facts. It builds on the open letter Nick Nemeth (politician) published to Speaker Johnson in March, which translated a single insurer’s 9,612-page regulatory filing into one number most people had never seen.

We are going to do something narrower and, we think, more alarming. You do not need a leaked document or an investigative source to see the structure. The companies have written it down themselves, in filings any member of the public can pull, and we will read it back to you in their own words.

We name names. Athene. Apollo. Blackstone

What follows is a long and very cogent examination of what is going on within these reinsurance arrangements. In the old days life insurance funds used to be very boring and conservative but then things changed.

Around 2009, a different kind of owner discovered the life insurance balance sheet. It had a different idea.

The idea was this. The conservative bond portfolio that a traditional insurer holds looks lazy. It earns a modest, safe yield. But what if you replaced the conservative portfolio with higher-yielding assets? Private credit. Collateralized loan obligations. Structured products. Asset-backed finance. The liabilities stay the same, the cost of funding stays the same, but the asset side now earns several hundred basis points more. That incremental spread, multiplied across a balance sheet of hundreds of billions of dollars, is an enormous and durable stream of profit.

What follows is an explanation of how this translation from insurance to asset management happened and it concludes with this explanation – following an intensive examination…

The life insurance industry spent a century building the most valuable asset a promise-making institution can hold, which is the boring, unimpeachable trust of the people it serves. Over the last fifteen years, a set of brilliant, aggressive, and entirely legal financial engineers worked out how to convert that trust into spread and fees, and they did it in plain sight, in public filings, in a language precise enough to be accurate and dense enough to be unread.

Back to the UK and UK life insurers

Let’s look at the options for L&G.

Gordon Aitken explains that unless L&G’s management defends its current status as a standalone insurer it will find itself increasingly owned and ultimately swallowed by an American financiers either posing as insurers or private equity financiers. Blackstone is already in with L&G enabling it to front a lot of buy in/out business last year.

It could go down the Standard Life route and run a sub entity for the heavy duty BPA business. It could be sold off in bits or taken over as one entity.

The American options – which predominate – have questions about them. These American options depend on members of UK pension schemes, swapping an employer’s covenant for the covenant of American firms explored in great depth by TSCS

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Winning your league of one- no way to VFM! Self validation can defraud those who pay.

Posted on May 26, 2026 by henry tapper

Thanks to Aron Muralidhar for pointing out that what can go on in Canada, can go on in the USA, my point being that benchmarks must be refereed by officials not paid by the team.

We long to think that our institutional fund managers are showing the way. The USS, LGPS and a smattering of collective funds are thought to be above “value for money”. But the truth is that the money that goes in and the money that comes out of these huge DB funds is the same money that goes in and out of a DC savings scheme.

This post by Dan Mikulskis shows how the CPP has been ripping off its members by over charging and undelivering

There is scrutiny on our DC pension plans that we don’t see in other countries or – for that matter – in other types of pension plans.

We have underperforming DB plans in this country, there are some parts of LGPS and there is the whole of the USS that are not returning what the benchmark for DC is becoming. The Cap data performance measurement, published this weak by Corporate Adviser’s Sam Seaton will show us an independently refereed league table that we can trust.

We have in Nest, L&G, WTW’s Lifestyle and People’s four DC funds that might like to think of themselves (having got to the £25bn scale) in a premier league. But they are not, they need to be pitched against teams from the lower leagues as well as those from abroad.

As for these American and Canadian aberrations (I wrote about the Canada fraud this weekend,

We can’t have a system building up where pension schemes are incomparable as being in their league of one. Though that suits its executives who can be rewarded as no one else is rewarded, that does not make their pay immune from criticism.

There will come a time when British DC plans will hit hard times with people’s “real” money at risk. There will be times when CDC challenge DC funds in delivering long-term value. All of these funded pensions are comparable and even if the sophisticated benchmarks measure more than the actual returns, ultimately it is the place in the table that will matter.

I don’t think that level of accountability is something that CIOs and CEOs and CFO’s of commercial fund managers look forward to.

Fund managers are employed by trustees to deliver and if they fail, they should be held accountable by trustees as  contractors.

I suspect we are a long way from there but that is where we have to be heading if we do not head up in America or Canada where fund managers manage their reward and their league tables so that they are top in pay and performance. It is what the members get and (in the case of DB) what the sponsors pay, that matters most,

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Wow, a CFO blown away by an analysis of CDC? We have a proper debate here!

Posted on May 25, 2026 by henry tapper

Wow!!!!

This is the comment of Pension Oldie , known as an accountant , CFO and vintage Pension Trustee. He continues after admitting to have been blown away by Christos Christou’s work of genius

Wow! I will need to re-read again many times to fully understand the analysis, but it does appear to be an overwhelming case for a whole life collective pension scheme, with retirement CDC as a “stop-gap” product for those who have lost out from being in an individual DC arrangement.

My first thought is that it shows the national folly of abandoning DB as the de facto default pension arrangement. In DB, the employer defines the deferred remuneration, leading to greater certainty for the member and removes the need, like CDC, for active decision making by the member and possibly itself a significant contributor to stress related illnesses. DB also benefits from mortality credit and minimises losses due to excessive administration and advice costs by placing the responsibility on the scheme sponsor. Further with DB the pension benefits do not go down, are inflation protected, and are guaranteed by the sponsor and insured through the PPF.

The second thought is that the benefit of whole life CDC is based on the assumption that the member will remain in the CDC Scheme throughout his working life. Much of the benefit is lost if the Member leaves a CDC scheme to join an employer who only offers contributions to an individual DC. A subsequent transfer from the DC pot into CDC benefits is subject the same transition risks as from accumulation to decumulation DC. This would appear to be a strong argument in favour of following the Australian example in allowing the employee to chose the pension scheme to receive the employer’s contributions.

The third thought is that given the Increased efficiency of CDC (and DB) over DC in converting contributions into pension, should this not be reflected in auto-enrolment minimum contributions with proportionately higher contributions being required into a DC arrangements. The present auto-enrolment Regulations for DB schemes replace the 8% contribution requirement with a benefit test of a 1/120th average salary accrual rate with inflation protection and spouse’s pension rights. Could not a similar target benefit test be applied to whole life CDC schemes and required contributions set accordingly?

My final immediate thoughts are: What will the drying up of annuity purchase cash flows do to the risk profiles of the insurers; and could the UK economy withstand a minimum of a £3.2BN annual decimation of the pension advice and asset management industry?

 

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Australia can teach us about Super-saving but can we teach them about pensions?

Posted on May 25, 2026 by henry tapper

My friend Jim uses the word “annuity” where we would use “pension”. He stands up for three actuarial firm, Optima, Jubilation and Apricot actuaries. Of what and whom I know  he’s the greatest Australian advocate of a regular income for life. Here is his latest question of those who advise on “Supers” in that neck of the woods.

In Britain, the decisions are increasingly being given to employers and they can make choices of whether to collectivise the pension system or remain with individual pots that can be flexed and eventually fixed with an insurance product.

Australia is different. Here decision making is with the savers into their Super saving funds. They may employ advisers to get what we call a “pension” but Jim questions whether more Government intervention could be on the way, as has happened in the UK.

Whether you are pro or anti converting pots to pensions, you will enjoy this conversation and reading it saves on aviation down under!

Have annuities become ‘relevant’ under the Best Interests Duty?

BY JIM HENNINGTON

 

In recent years, lifetime annuities have sat at the margins of financial advice – niche, complex to advise on, and often left on the periphery. Less than 2% of superannuation reaching the retirement phase goes into lifetime income products, including annuities.

Not rejected outright or debated intensely. Just… not central. But that environment appears to be changing. 

Across Australia, superannuation funds, platforms, and insurers are increasingly introducing annuities – used here as shorthand for lifetime income products – into their retirement offerings. What was once niche is becoming more visible, more accessible, and a more prominent element of the system itself. In several of Treasury’s Guidance on best practice principles for superannuation retirement solutions, (Best practice principles) of February 2026, ‘lifetime income products’ are placed ahead of account-based pensions – a subtle but telling signal of their intended role in the system.

This raises an important and largely unspoken question:

At what point does a product class move from ‘optional’ to one that must be considered relevant under section 961B of the Corporations Act 2001 (Corporations Act): Provider must act in the best interests of the client (Best Interests Duty)?

From peripheral to present

Historically, annuities have been easy to exclude as they were:

•   limited in availability

•   often seen as poor value due to low interest rates

•   rarely requested by clients

•   difficult to compare

•   often absent from standard advice frameworks.

In that context, omitting them from written advice was not unusual and was often defensible.

Today, that context is shifting. More than a dozen providers now offer lifetime income products/annuities across platforms and superannuation funds, with several large funds integrating them into retirement solutions or actively developing offerings.

Policy settings, including the Retirement Income Covenant and Best practice principles, are encouraging funds to consider how members can draw sustainable income over time, with longevity protection and enhanced means-test incentives as part of that conversation.

As availability increases and institutional support grows, the classification of these products as ‘peripheral’ becomes harder to sustain.

A profession without a settled view

Conversations with approximately 50 advisers across Australia suggest that the profession has not yet formed a consistent position on lifetime income streams.

Instead, three broad perspectives emerge:

•   Some advisers are supportive particularly where longevity protection, Age Pension optimisation, or behavioural discipline are key considerations.

•   Others are open but cautious. They recognise the potential value of guaranteed income, but express difficulty in comparing products, understanding structural differences, and explaining trade-offs to clients with confidence.

•   A third group remains sceptical, citing concerns about relevance to wealthy or younger clients, as well as irreversibility and the risk of client regret, particularly where future capital access and estate flexibility are prioritised.

What is notable is not disagreement itself, but the absence of a shared framework. Advisers are not uniformly rejecting lifetime income streams, but nor are they consistently equipped to assess them.

When complexity meets obligation

This fragmentation may have had limited consequences when lifetime products were viewed as optional. However, if they are increasingly viewed as a relevant class of financial product, the implications change materially.

Under the Best Interests Duty, relevance is not determined by adviser preference, familiarity or ease of implementation. It is shaped by section 961B (2) of the Corporations Act, which requires advisers to identify the subject matter of the advice sought, including what is implicit, for example, a client who wants to avoid running out of money in retirement, even if they have not asked for a specific product type. It also requires advisers to conduct a reasonable investigation of products that would

“reasonably be considered as relevant to advice on that subject matter”.

If lifetime income streams now meet that threshold due to their availability, policy support, and potential role in managing longevity risk then the standard shifts.

The question shifts from:

“Do I use lifetime annuities?” to:

“Can I demonstrate that I have considered them appropriately?”

As SMART Compliance consultant and founder Brett Walker, notes:

If a product class is widely available and relevant to client outcomes, I suspect the regulatory expectation shifts. Advisers may need to demonstrate why it has not been considered, or if considered, why it has been discounted and what the client is giving up, not simply that it is outside their general area of expertise – even if clients haven’t requested it.

The real barrier is not reluctance: It is how to evaluate these decisions

The challenge is not simply a reluctance to use annuities, but the absence of a shared and consistent way to evaluate them within existing advice processes.

Lifetime income products introduce trade-offs that are fundamentally different from accumulation-phase investments in terms of:

•   certainty versus flexibility

•   income for life versus access to capital

•   protection against longevity versus irreversibility of decisions.

These are not easily reduced to a single metric that can be compared with an account-based pension. In addition:

•   product structures vary significantly

•   comparability becomes inherently complex

•   modelling tools are often underdeveloped in this area

•   projections are sensitive to assumptions about lifespan, markets, and behaviour.

Advisers must contend with the reality that many of these decisions are difficult, if not impossible, to unwind once a client has implemented a recommendation.

As one adviser observed:

“The complexity makes it difficult to make confident assessments… I need a high degree of confidence when making a recommendation that will be difficult if not impossible for the client to unwind.”

This is not just about products. It is about how advisers are equipped to make and defend recommendations.

A gap between expectation and capability

There emerges a potential gap between regulatory expectations and what advisers can do:

•   Expectation: that advisers consider all relevant strategies and products

•   Capability: a lack of frameworks for evaluating and comparing lifetime income solutions with each other and with account-based superannuation.

In many areas of advice, gaps such as these are bridged by established methodologies including:

•   asset allocation frameworks

•   risk profiling tools

•   insurance quote comparison tools.

In the case of lifetime income streams, no equivalent structure has clearly yet emerged.

A question the industry may need to confront

Annuities have long been positioned as a unique tool – mainly for risk-averse clients but perhaps unnecessary for many others. However, the conditions that once made them easy to exclude are changing.

If lifetime income streams are now sufficiently available, dynamic, visible, and relevant within the retirement system, then the industry may need to ask:

Are they still optional to include in advice or are they becoming unavoidable?

And if the latter is true, a second question follows:

How can advisers demonstrate that they have assessed lifetime income options in a way that is consistent, defensible, and aligned with client outcomes?

Without that structure, the issue may not remain theoretical for long.

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Gen Z – you are pensioner’s kids/grandkids! We’re all in one pension fund – have the same values.

Posted on May 25, 2026 by henry tapper

I was struck by this post by Chis Eastwood who has every advantage over me other than the experience of growing old!

Here is a challenge for a pension scheme that serves me and my 28 year old son. He has a value set which puts him in the third of people who chooses a job on the way the employer behaves. Everything  is at the touch of his finger, he cares about his society, environment and the way he is governed. He is idealistic and the reality of getting old for him – is long away,

Maybe the idealism of youth gives way to the pragmatism that 64 years olds have, to me a pension must pay me what I expect of its but that doesn’t stop me not wanting to invest in noxious things. Maybe I choose not to invest in fossil fuels because I see the risks more financially than ecologically and maybe its the other way with my son. But that’s how we prioritise things at different stages of our lives.

A “whole of life” pension should be one that gets its members approval when they join at one end of their careers and is still getting it right up to 40 years later. The harsh reality is that your boss is likely to change over 40 years and so is your pension but that does not mean that those who invest your money cannot set out to meet the needs of all the scheme’s members.

Penfold, fronted by Chris, have discovered a third of its savers choose their employers for their behaviour and it would be good to think that part of that choice was around the pension that the boss had chosen for the staff. We know however that either knowledge or interest in the pension scheme is minimal, we know that the vast majority do not choose where to invest but use the default fund. This tells me that a collective fund where everyone is invested in one fund could be run with no interest in pleasing the third of Generation Z who do give a damn.

But that should not be good enough for trustees if they see good environmental policy, good governance and good investment in society as likely as good for everyone in the long run. My common sense tells me that our environment , our way of behaving and our investment in society will lead to better outcomes for both my generation and my son’s.

And of course a pension scheme has as its aim to be fair across generations. Right now I see DC schemes investing into the kind of growth assets that please my son and then de-risking into different vehicles that I find hard to call “investments”. It is called “lifestyle” investment which (among other things) means de-risking funds from the idealism for a better environmental,  governance and social investment strategy.

I do not think that lifestyle changes like that. There are 30 years between me and my mother she at 94, shares the same value set as I do and I do as my 28 year old son does.

We all want better values in our investments even though we know we have a relatively short life ahead of us. That is because old people want an inheritance for their children and grandchildren that gives everyone the same improvements.

This is not me having a go at Chris or Penfold, far from it, they – like other firms like Pension Bee offer savers an access to investments that matter and occupational “whole life” schemes that aspire to look after Gen Z as well as pensioners had better look and learn from such firms.

I hope that this will encourage the workplace pensions like Penfold and Collegia that provide a service for young companies, young employees and those that have the pure idealism of youth to feed into whole of life schemes to make my and my mother’s funds as progressive as theirs. I see some of that spirit when I meet people from some large DC and DB funds. I know it can be done but we must learn from people like you!

 

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It’s not just the Premiership but our football pyramid that Britain can feel proud of.

Posted on May 25, 2026 by henry tapper

From a financial perspective, the Premier League is what matters. But to Britain, what matters is our various leagues including those in regions of our United Kingdom. I don’t disagree with anything in this article but add to it as a supporter of an English club in our fifth division.

But it is this comment that most resonates.

We are starting to think the same about the IPL, there is nothing that brings countries together like professional sport . Here is the fabulous report in the FT from its editorial board.

Like many of the readers of this, I was listening to the radio to the last minute of Tottenham v Everton wondering if Tottenham or West Ham could stay up, whether Sunderland and Brighton would make it to Europe. What would happen to Chelsea if they didn’t!

But for me, the highlight of the season was the battle between York and Rochdale for places in the EFL. In the end both did and justice was done. Today my fingers are crossed for Partick Thistle who deserve their place alongside St Johnston as promoted to the Scottish Premiership. I am of course selective, my choice of teams extends down the various pyramids and include my childhood town; – Shaftesbury FC

 

 

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Aeon CFO- PMI accredited Trustee. Christou on Mansion House trade offs for DC

Posted on May 24, 2026 by henry tapper

This looks like a lot of fun. Christos is an investor and a trustee and will talk with us about the Mansion House Accord and how he sees it as Aeon’s CFO

I love Aeon – their mission statement is quite something.

We are doing for renewable energy what Nikola Tesla did for the fractional horsepower engine and Apple and Microsoft did for the personal computer. By decentralising and innovating, they enabled us all to access its benefits.

Our mission is to do the same for energy – so that you too can harness the energy that surrounds you.

Christos will be talking with us  next Tuesday at 10.30 am. Christos has written a highly technical discussion paper on CDC, from his perspective of being both a trustee and CFO. It will be posted on this blog.

He is a newly PMI accredited Trustee.

Ok, I know – it’s not a Bill, it’s an Act and if you don’t like mandatory allocation to private and UK assets , there’s not much that you can do but wait until a Conservative Government gets elected and remembers to change the law.

Christos Christou looks a smart chap and will be pleased to know that many power companies are considering CDC after education from their unions! That gives even greater opportunity for investment in the kind of assets he’s interested in.

and he’s got quite a CV!

Here is that CV highlighting he’s a powerful chap!

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From best of Dutch to worst of British pensions!

Posted on May 24, 2026 by henry tapper

I had such hopes that the VFM podcast had turned a corner but I was mistaken. This week’s conversation with Jerry Butcher, the Director of Workplace at Scottish Widows is a stinker!

Jerry Butcher came by recommendation; he is Robert Cochran’s boss and Robert is much liked by everyone and especially by Darren and Nico.  Jerry arrived fresh from a career in investment banking and before that  the army and a spell getting an MBA at Insead. With time at Deutsche and Lloyds Bank, he has little  experience of pensions and while he was urbane and modest, he is clearly at Scottish Widows to clear up the mess that Scottish Widows master trust and its disastrous administration of its personal pension book created.

Although not mentioned on the Pod, the answer for Scottish Widows is to twist the arm of its parent Lloyds Bank to get what must be the best part of £10bn from the Lloyds staff DC pension scheme known as “Your tomorrow“.

As my head picture says “marketing can create value for a company, not necessarily the customer.

The ballooning in size of Scottish Widows master trust will give it scale but not credibility. That went some time ago, Scottish Widows win very little on the open market and listening to Jerry, they have decided they aren’t going to in the future.

The tactics as laid out as an investment banker would, is to engage with existing customers through technology. Everything from joint apps with LBG so that those who have a Scottish Widows pension pot , can see its value on their Lloyds banking app. This is the headline of this podcast (apart from the news that we are going to hear about Arsenal’s triumph for the next six months).

Presumably the aim of Lloyds for Scottish Widows master trust is to make customers into experts so they can take decisions on how to keep money with Scottish Widows. But after Jerry helped sell off Scottish Widows investment business and then its annuity business, it is pretty hard to see how Scottish Widows will compete , other than as an adjunct to Lloyds Banking Group. This does not make them a provider of pensions, it makes them a wealth manager.

In an excruciating section of the pod’s 79 minutes we are told that Lloyds is the only high street bank whose venture into pensions has worked. Darren reminds us that NatWest  screwed up with Cushon, HSBC screwed up with their business-less master trust and Barclays never even tried (despite having Nico onboard at one stage).

Lloyds success we are told was in buying Zurich’s DC platform and their master trust. I helped build that business and remember selling to Royal Mail. Hilariously they came to Cheltenham to visit Eagle Star (as we were) to invest in the platform, arriving at the date in two jaguars, the Royal Mail trustees were  directed to the mail room at the back of the building, we didn’t get the business.

But Zurich picked up one big client 10 years later and it was the same Royal Mail who used the Zurich platform for their DC scheme.  Royal Mail’s Zurich DC plan is now their Scottish Widows plan but it is now closed , having been superseded by the Royal Mail Collective DC plan (aka as CDC).

It is not surprising that CDC does not come up in conversation, it did not come up in Robert Cochran’s recent Times article on “Radical Retirement”. Scottish Widows, unsurprisingly don’t sound at all enthusiastic about CDC.

I have to say that this podcast was an embarrassment, the week before we had Jasper Hack talking good sense about the Netherland’s three pillars. He spoke from a position of knowledge and made more sense in his second language than Jerry made in his first.

There is nothing wrong with investment bankers but they make dreadful mistakes when running pension schemes. They see pensions as an extension of banking and everything that Jerry said reminded me of where pensions have gone wrong. Jerry is clearly a nice guy and will make financial sense to Scottish Widows who have done little for pensions except contribute an annual report that even I don’t read.

Darren and Nico clearly think that Scottish Widows is a success, nobody else does. The best thing that they could do is turn their master trust into an UMES workplace CDC plan. I see no chance of that. Robert is a good guy doing a good job but he is working with an outfit that is little more than an adjunct to LBG. Banks do pensions no good, investment bankers can make good decisions on finance but they don’t understand pensions!

 

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Why are insurers kidding us they want a radical retirement shake up?

Posted on May 24, 2026 by henry tapper

I must say I am struck dumb reading first the post and then the Times article that calls for a radical shake up to retirement.

Robert is a good guy and likes what I like – simple pensions. But why does he not want CDC to become an alternative to DC and DB? Is is not radical? Is it not simplifying pensions for people?

a “radical retirement shake up

I found myself having to comment on LinkedIn rather than on the Times article because clearly Times readers are more bothered by wealth and IHT than that most radical of ideas – a pension.

What is going on Robert? I know you represent Scottish Widows who have said they don’t intend to offer Retirement CDC through its master trust but this is an article about what the Pension Commission is saying and it says something about collective decumulation in Chapter 5 that you cannot ignore.

While we may consider “engagement” with DC, a way of getting people to take good decisions, it is quite obvious from the charts that those who can afford a sustainable pension are those who can afford to buy sustainable real income.

We know that the withdrawal rate needed to pay yourself an income for life that keeps pace with inflation is represented by the light blue box (4% or less of capital) and we can see that people only start doing this in any number when they have a pot of £100,000.

When people work and save to state pension age , when they have a full state pension and at least 14  years in AE (as you will have if you started AE in 2012) then a combination of tax free cash and real retirement income makes for a real income that is accelerated by collective accumulation and decumulation of up to 60%.

We should  be ambitious to give people the best retirement income, not moaning that employers and workers aren’t paying away more of their income.

If we are concerned about adequate income in retirement, then we must start by getting people saving into pension schemes that pay a real income to them when they get to a realistic age. The State Pension Age is now 67, that is the default age for taking pensions, if you take income before 67 you’ve got to understand you reduce the income you get. If you choose to cash out, you have got to understand you are sacrificing your income.

Reading Robert’s article in the Times I heard a call for a radial retirement shake up. We had that in 2014/15 and what we now need is a return to a world where people think of their pension as starting with the state pension and building on it. We need people to think of the retirement wage they’ll get so they can stop working. It is a radical shake-up because we’re not asking ourselves the question “can we afford to stop working?”

The pension dashboard which looks likely to arrive this time next year will show people the harsh reality of a statutory money purchase illustration as an expected retirement income. It will not show a pot like a Scottish Widows/Lloyds Bank app. It will not show early retirement. It will show ordinary people the reality of being in later middle age (old age does not start at 67).

This means default retirement income that pays real pensions till the day we die, and if we have a spouse, until he/she dies if we die first. These are radical because so few of us are doing this any more and CDC will set a path that more and more employers will follow.

Flexibility from 55  (57 from 2028) is a luxury few earners cannot afford.

Sacrificing income for cash is a luxury that almost all of us cannot afford.

Entering a level pension/annuity or drawdown is akin to giving you a pay cut every year we have inflation.

These are as much a truth as that contributions are too low.

We cannot magic more money out of people’s pay, but we can give them deferred pay when they can no longer work.

The insurers are still pushing engagement with our pots as a way to afford retirement. They are being immensely irresponsible promoting “flex and fix” as a kind of wealth management when most people are underfunded for retirement.

What most people need is a way to afford to retire through what’s left of their sixties, their seventies, eighties and beyond. They need to offer protection for their family , especially their most loved one.

Flexibility is something that most people cannot afford. We manage our finances around a known income called “pay”, not around “wealth” – the mysterious pot that our pensions have become.

I despair of insurers for this irresponsibility and feel sorry for Robert Cochran who clearly tows the party line. I have just heard his boss Jerry Bucher on the VFM podcast (Director of Scottish Widows workplace) , this irresponsibility comes from the top.

The ABI can promote a line for its workplace pension members and it clearly is. The insurer’s  line denies the ordinary person a pension and replaces that promise with a false hope that in retirement will be wealth.

the mysterious  pot of wealth

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