Government reviews pension enrolment guidelines
The UK government is believed to be reconsidering the level at which employees in the UK would be automatically enrolled into a pension scheme as well as a potential exemption for small companies. The original changes, which would see hundreds of thousands of employees in the UK automatically enrolled into pension schemes, are set to come into play in 2012 although we may see some changes to the original guidelines before then.
The proposed changes could see the threshold for joining such schemes increase from £5,000 per annum to anywhere from £10,000 per annum. The main concern of the government seems to be the possibility that a very small pension fund would in reality simply replace means tested benefits and be of little assistance to low-income workers in the UK. Whether this is the case remains to be seen but the authorities are certainly reconsidering their initial recommendations.
A number of authorities in the UK representing small businesses have been lobbying the government for some time for exemptions for those with fewer than five employees where potentially the cost of setting up the arrangements becomes "non-cost-effective". We are likely to see major changes between now and the proposed introduction date of 2012 with a number of different authorities and bodies around the UK lobbying the government for a number of changes.
PwC advises pension age should be increased to 70
A report on the UK pension sector by PwC has advised the UK government to increase the state pension age to 70 years by 2046. This goes further than the UK government's current plans which will see the pension age in the UK increased to 68 by 2046. Currently the retirement age in UK is 65 for men and 60 for women although the retirement age for women is set to increase to 65 in the short term. So...Read More
Private-sector final salary pension schemes may hit record deficit
It is believed that the largest 200 pension schemes in the UK, all final salary schemes, could hit a combined deficit of around £140 billion within the next 12 months. This comes at a time when the UK final salary pension scheme, at least in the private sector, is under serious scrutiny with many companies looking to close their schemes to new entrants and also, where possible, transfer to money...Read More
Couples fail to discuss retirement funding
A report by Prudential claims that the vast majority of UK couples fail to discuss their retirement options before it is too late. Many over 55's are currently sitting on significant equity in their properties although equity release options are very rarely discussed in detail. Indeed the report suggests that over 30% of couples aged 40 have no idea about the financial strength or the financial we...Read More
Is the government's pension policy working?
With 9 out of 10 final salary pension schemes now closed to new members there are serious concerns that the UK government's pension policy is not working. More employers than ever before are also complaining about the cost of enrolling their members in pension schemes and indeed the introduction of new pension regulations has not helped the situation. The pension situation in the UK is now at a cr...Read More
Deutsche bank strikes deal with BMW UK pension scheme
In what many believe will become a major sector in the pensions industry Deutsche bank has announced a deal to take on the longevity risks of nearly £3 billion connected to the BMW UK scheme. This is the largest deal of its kind to date and will see BMW transfer the risk that scheme members live longer than expected and the increased costs associated with this. Using complicated insurance and...Read More