Ian Neale, Aries Director, is a frequent contributor to the debate in the national pensions press.  Read Ian's incisive commentary, and share his unique insights into the problems and opportunities of pensions in the UK.  Here is a recent sample to get you copied in. Ian welcomes your response - just click here to send him an email.


in Pension Funds Insider

The pensions industry must support the fight for financing later life

On the day Carillion collapsed this week, I was in a meeting to discuss the scope of the forthcoming green paper on care and support for older people, expected by late July 2018. It's important we get this right, because we need a sustainable plan to avert a catastrophe. We face a crisis in funding on a scale which could dwarf even Carillion.

Funding for later life is not all about pensions. Some of us – about 30% of the population at the moment – will need care, and about 10% are likely to need residential care costing £100,000+. Care homes charge around £30,000 per year, few can hope to save for a pension that size.

There's a widespread belief that the state provides social care, but in reality more and more self-funding is being expected (Scotland, where care is free for those 65+ who the local authority has assessed as needing care, is an exception). Where local authorities can and do still pay, it is typically only about 60% of the true cost, which means care home providers have to seek a cross-subsidy from those who don't qualify for state support; or go bust.

This is not sustainable; arguably not even in the short term. Four Seasons, one of the largest UK care home providers which looks after some 17,000-elderly people, has just had to be rescued by a US hedge fund. Thus a repeat of the 2011 Southern Cross catastrophe might have been narrowly averted. Images on BBC news of vulnerable people sitting outside in the street in wheelchairs must be a nightmare prospect . . .

18 Jan 2018   Read the full article


in Pension Funds Insider

We need to get a grip on retirement saving
People need to know how much they have saved in various pensions during their working life, and where the money actually is now.

Beginning with a government consultation six years ago, the Coalition Government decided on 17 July 2012 that 'pot follows member' was the solution to address the proliferation of small pension pots. The majority of respondents had favoured the alternative 'aggregator' approach, mentioning reasons like lower administrative costs and better protection for individuals.

Enabling legislation for 'pot follows member', an initiative particularly associated with former Pensions Minister Steve Webb, exists in the Pensions Act 2014; but there has been no indication of when - or if - it will be commenced.

Instead, a groundswell of support has since materialised for the pensions dashboard concept, something very like the 'virtual aggregator' preferred by many back in 2012. In Budget 2016, the Government declared it would "ensure the industry designs, funds and launches a pensions dashboard by 2019. This will mean an individual can view all their retirement savings in one place."

The industry swallowed hard and put together a Prototype Project, managed by the ABI with Treasury sponsorship, which demonstrated in May 2017 that the idea was feasible. To retain momentum after the general election in June, industry contributors agreed on a further Project . . .

17 Nov 2017   Read the full article


in PMI Technical News

This article looks at the momentous events that occurred in 1997, and discusses the extent to which the industry is still feeling their effects. From GMP accrual being ceased to the introduction of pensions freedoms, we look at the key events that have shaken up pensions, and shaped the industry into what it is today.

The recent news that the rise in state pension age to 68 will be brought in seven years earlier than expected in 2037 drew criticism, with one newspaper describing it as 'picking the pockets of millions of people'.

For many, this change twenty years into the future may seem a long way off, but if we look at what's happened with pensions in the twenty years leading up to this point, then without a doubt 1997 was particularly portentous.

This was a year that it is now claimed changed the retirement prospects of the nation forever – a year that set the tone for much of what was to come by way of further changes to pensions.

Twenty years ago – the world of pensions was a very different place

In the 1990s, most defined benefit schemes were still open to new members, who could look forward to an income of up to two- thirds of their final salary in retirement. Some schemes were in surplus. Employer contribution holidays for several years were quite common, driven partly by Inland Revenue restrictions on surpluses.

However, pension provision was becoming more burdensome. The landmark 1990 Barber case had ruled that pensions were deferred pay, and banned sex discrimination in pensions. . . .

Nov 2017   Read the full article

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