Posts Tagged ‘Retirement’

Hugh Nolan

Schrodinger’s Retirement

So apparently we’re all living longer than ever before and the Government’s solution to keep State pensions affordable is to make everyone retire later.  That’s all well and good if your job is easy and you can keep doing it until you’re 67 or 70 (so MPs and Scheme Actuaries will be fine, thankyou very much) but it’s not so practical in many occupations where the physical demands are much higher.  In fact, recent research reveals that 12% of people within five years of State Pension Age are too ill or disabled to work.  According to the TUC’s report “Postponing the pension: are we all working longer?”, only half of people aged 60 to 64 are economically active.  The half that aren’t earning does include the lucky folk who have been able to choose to take early retirement but it also includes those who have been made redundant or are unable to find a job, as well as those too sick, so it’s a safe bet to say that far more than one in eight people in this age range are unable to work. Read more »

David Bogle

For those outside the world of pensions, triple lock is perhaps a term from the sedate world of canal cruising holidays. However for pensioners of the future it is a term they should acquaint themselves with and the impact it has on their future prosperity.

This fairly new chestnut of the pension triple lock raised its head recently. Baroness Altmann, former Pensions Minister in the Cameron Government, has voiced the opinion that the triple lock would not be affordable after 2020. Baroness Altmann has been vocal on pension policy in the past few weeks, (well since she left Government), with her earlier comments on Tata Steel and pension provision. Yet what does the pension triple lock mean and why should our future pensioners care so much? Read more »

David Brogan

In 1977, Monty Python’s Life of Brian asked ‘What have the Romans ever done for us?’ to which it appeared, well, quite a lot actually. However, with the imminent changes within the pensions industry, the question you may have to consider is rather ‘What has the Government ever done for us?’

For starters, there is the introduction of the new basic State Pension which from 6th April 2016 will deliver a clearer State Pension for future pensioners. The current basic State Pension and State second pension (S2P) will be abolished and replaced by a single-tier, flat-rate State Pension of £155- a-week paid to everyone who has paid 35 years of National Insurance contributions (NICs).

A change of this magnitude will be rightly debated and queried, and as administrators there are questions that we can expect to be asked, namely why the government has introduced such a significant change. In turn, we can also expect many pensioners to now have a greater focus on their personal pension benefits as members look to clarify how the changes may affect their total monthly income. Read more »

Richard Smith

Spence & Partners latest blog for Pension Funds Online

It’s been 7 months since the new pensions freedom flexibilities came into effect, completely re-drawing the landscape of retirement savings. During that period, around £5Bn of cash has been withdrawn from the pensions system, both from cashing in small pots and drawing income out of larger ones. However, with an average “cash-in” value of around £15,000, Lamborghini dealers are still waiting to join the party.

Concerns about profligate retirees blowing their retirement savings have so far not come to pass, with general feedback from the industry that people tend to be quite sensible in the decisions they are taking over their retirement income. This is not particularly surprising – it seems a little unlikely that someone who has saved all their working life would suddenly spend the lot as soon as it become accessible; hard-working savers deserve more credit than that. Read more »

David Bogle

Last time, I wrote about the latest mortality projections from the Continuous Mortality Investigation (“CMI”) and the effect this could have on pension scheme liabilities and that it may provide some relief for trustees and sponsoring employers. I then began to cover how mortality affects members of Defined Contribution (“DC”) schemes. This blog covers these issues in more detail.

In DC schemes, members pay contributions towards their own personal fund at retirement, referred to as the “accumulation” phase. When the member retires, they use that fund to finance their retirement, in pretty much whatever way they choose (i.e. the “decumulation” phase). The growing trend towards this process has prompted a joint paper by three actuarial bodies (the Australian Actuaries Institute, the Institute and Faculty of Actuaries and the American Academy of Actuaries), on the issue of longevity risk (“the Joint Paper”). Read more »

Alan Collins

Last week, the Financial Conduct Authority (FCA) splashed onto the business pages extolling the virtues of choice for consumers in the pension annuity market.  Their review has found that 80% of consumers purchasing annuity from their existing providers could have got a better deal by shopping around in the open market.  I welcome the FCA’s continued efforts in this area and trust that, in time, it will lead to a better deal for consumers.

This drive to encourage consumers to shop around with their defined contribution pot should be mirrored in defined benefit (DB) arrangements.  Read more »

Alan Collins

“The acceleration of changes to the State Pension is not a surprise, as life expectancies continue to increase. Within retirement, life expectancy has almost doubled over the last century. While it may not be a particularly cheery message for the festive season, there is unfortunately no magic wand that can be waived when it comes to pensions. Simply put, the only way to avoid having to work longer to fund your retirement is to save more and save earlier.”

 “It is likely these changes will increase the blurring of the lines between working and retirement with more and more people continuing to work even when they are receiving pension income.”

Kevin Burge

Avid readers (assuming there might be at least two of you) may recall how I wrote about the Beatles song and when you reach the ripe old age of 64.

Two more statistics have jumped out at me over the past couple of weeks both of which emphasise that pensions more than ever need to hold a much more prominent position in our thoughts.

Firstly the Department for Work and Pensions published a raft of statistics relating to the State Pension Age. I am not sure whether they are trying to hide bad news or jumping on the Royal baby bandwagon but nevertheless have stated that over a third of children born in 2013 will live to be at least 100. This is then compared to when the Queen was born (1926) life expectancy was 70, when Prince Charles was born (1948) it was 77 and when Prince William was born (1982) it was 85. Read more »

Kevin Burge

When I’m 64…

Spence & Partners latest blog for Pension Funds Online –

“Will you still need me, will you still feed me, when I’m 64?”

That famous Beatles line maybe summed up how twenty-somethings viewed 60-year-olds back when the song was written. Their take was that by the time you got to 64 you would need to be looked after and cared for as you probably had one foot in the grave.

In the 1960s private pensions were relatively new, equalisation was still to rear its head (men retired at 65 and women 60 – can we all remember those days?) and people generally died within five years of retiring if they actually managed to make it that far!

Now if we fast forward to the 2013, Read more »

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