Pension Shakeup | Long-Term Investment Strategies


Last week, a press release was issued by the Department of Works and Pensions implying that pension scheme investment managers, the folks that determine the size of our pension pots, are being short-changed by the UK financial investment industry.

And, as a result, the growth in our pension fund investments is being held back.

Pension

The title of the press release says:

Radical Shake-Up Of Advice To Pension Schemes Will Benefit Savers and Boost £1.6 trillion Pension Assets

A radical reshaping of financial advice services used by pension schemes for long-term investment strategies will benefit millions of savers and boost the nation’s £1.6 trillion retirement assets, under plans unveiled by the government today (12 March).

This is an extraordinary admission that our pension savings are not being invested in the most effective way to maximise the long-term interests of contributors.

The press release goes on to say:

Opening up the market for financial advice services used by pension schemes will help trustees get better value for money, boost members’ retirement funds and reduce employers’ shortfalls, according to ministers.

A Competition and Markets Authority (CMA) probe into investment strategy advice accessed by pension schemes found trustees were often denied clear information which would help them when weighing up options – hitting retirement incomes.

Now the government is acting to:

improve competition in financial advice services used by trustees of both defined contribution (used by the majority of pension savers) and defined benefit pension schemes

ensure better disclosure of fees and performance

encourage closer trustee engagement when buying such services

enable more effective monitoring of compliance by The Pensions Regulator

Uncertainty With Brexit

The past week, and who knows for how long into the future, has been a crazy week for politics in the UK.

Brexit is challenging the way to manage our democracy. And, it will be interesting to see how matters are resolved to observe the results of the EU referendum and cope with the apparent splits amongst members of parliament.

Let’s hope that this initiative is effective in boosting pension investment activity. If you would like to discuss options for your long-term investment, speak to our team of experts today. 


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