Latest developments in pensions industry

By Gareth Jones

In the past month, as things open up and the economic recovery takes hold, there has been renewed focus on how younger people engage with their pension savings. This issue has  been the subject of discussion by media and industry commentators and was underlined by the stock market debut of PensionBee, the online pension provider and consolidator. The company, which allows customers with a number of small pension pots from different employers to bring them together in one place, is now valued at over £350 million following its IPO. Meanwhile, asset manager Vanguard has launched a new low-cost retirement advice service for British savers who previously have lacked guidance on pension planning.

Both developments arguably reflect a gap in the market among younger savers and underline the need to simplify people’s pensions arrangements to help them engage with them properly. This, of course, was meant to be the one of the key objectives for the long-awaited pensions dashboard. However, despite legislation being put in place, the dashboard service will not be available to retirement savers until 2023.

Elsewhere on defined benefit-related policy issues, things have seemingly calmed a little since the frantic start to the year, where a range of new legislation and policy measures had been put in place via the Pension Schemes Act and the Budget. At the end of last week, the Financial Services Bill finally received Royal Assent, which provides a legislative basis for post-Brexit financial regulation. Much of the pensions industry’s focus is now on the implementation of these new legislative requirements, such as scheme funding arrangements and climate risk reporting. In the past month, The Pensions Regulator has published its climate change strategy and its new powers to take action against those who put pension schemes at risk.

The next key event in the policy calendar is the Queen’s Speech, taking place next week, which will set out the new legislative agenda for the coming year. The pensions minister, Guy Opperman, has previously indicated that there would be no pensions-specific bills this time around – so any new proposed laws are likely to be in the form of secondary legislation or through bills that encompass wider policy issues (eg on the issue of scams and fraud). Indeed, the issue of scams appears to be the one pensions issue that has kept policymakers animated over the past month – with interventions from Opperman, the Pensions Regulator and FCA in an effort to stem the rising cases of fraud. The government confirmed it would be consulting on the issue later this year and “considering additional legislative and non-legislative solutions to effectively address the harms posed by all elements of online fraud”. A particular focus for policymakers is likely to be on the role of online platforms (Google and Facebook) and whether they should have a legal responsibility for preventing and removing content that leads to pensions scams from their sites.