Pensions & employee benefits roundup - August 2017

Gareth Davies, 15 August 2017

Lesly Titcomb, Chief Executive of the Pensions Regulator drew attention to the upcoming increases to workplace pension contributions and that this would “test the inertia principle”. In April 2018 contributions from employees are set to rise from 1% to 3%, and then to 5% from April 2019.

One of the reasons auto-enrolment has been so successful (8 million based on latest figures) is that it didn’t actually rely on people to do anything. In that sense, auto-enrolment has been a complete non-event, requiring very little thought process.

We have arguably removed so much friction from our lives these days. If we think of the world of retail, we can now make contactless payments in-store and use websites that remember who we are and make suggestions based on people like us.

Whilst this lack of friction has certainly helped make auto-enrolment a success in getting people into a pension, we arguably now face two contrasting tests. The first one flagged by Ms Titcomb that people may start to notice higher payments (with the concern that they opt-out). The second is whether we should actually try and openly engage with people. Nobody really believes that contributing auto-enrolment minima is going to be enough for most people to retire on. We actually need people to consciously opt-up.

This does mean bringing pensions out into the surface and not trying to hide them but to demonstrate just why they are important - to make pensions more immersive and user friendly, helping people to better understand and hopefully love pensions a little more. The demise of DB means that people will need to take a greater interest in their pension(s) throughout their life. We simply cannot shy away from this…


Throughout the month our research team keep a close eye on what is happening in the pensions and employee benefits industries. Here is a roundup of the best news articles and stories for July 2017. 

Employees get more work done at home
Reward, 3 July

Workplace productivity levels in the UK are still a long way behind companies operating in countries such as Germany, the US, and France, a report published by Red Letter Days for Business has revealed.

Should your pension scheme really be offering reduced Transfer Values?
Capita Employee Benefits, 4 July

Transfer Values (TVs) have become an increasingly popular way for defined benefit (DB) pension scheme members to access their benefits flexibly (via a transfer to a defined contribution scheme). As well as the draw of flexibility, this has also been driven by low interest rates inflating the TVs payable.

84% believe summer perks increase productivity
Employee Benefits, 4 July

More than three quarters (84%) of employee respondents believe that receiving summer perks makes them more productive, according to research by Peldon Rose.

Skills upgrade will solve ageing population problem, not more saving
Professional Pensions, 5 July

Institute for Fiscal Studies (IFS) economist James Banks has warned the UK must upgrade the skills of workers and boost productivity to solve the social strains from an ageing population.

Auto-enrolment contributions increase will test inertia – Lesley Titcomb
Pensions Age, 5 July

The upcoming increases to auto-enrolment contributions will “test the inertia principle” of saving, according to The Pensions Regulator chief executive Lesley Titcomb.

David Gauke calls for government and industry collaboration
Pensions Expert, 5 July

In his first speech as Secretary of State for Work and Pensions, David Gauke called for consensus and collaboration to ensure a positive future for pensions, but admitted that it will take time to address some of the more challenging policy issues, from pensions tax relief to extending auto-enrolment to the self-employed.

Zero-hours contracts are unpopular with workers
HR Magazine, 10 July

Just 35% of UK adults would consider taking on a zero-hours contract. Three-quarters (73%) of workers would request fixed hours from their employer if they were on a zero-hours contract, according to research from PwC.

Auto-enrolment hits 8 million but late stager numbers soar
Corporate Adviser, 11 July

More than 8 million employees have signed up for a workplace pension since the launch of automatic enrolment, but the proportion of employers missing their staging date is soaring, new figures show.

Over 1 in 3 expect no support from employer if diagnosed with cancer
Canada Life, 11 July

New research finds 36% of employees think they would get no form of support from their employer if diagnosed with cancer – rising to 45% of those who have cancer or have suffered from cancer in the past.

FCA publishes interim retirement outcomes review
FCA, 12 July

The FCA has published the interim findings of its Retirement Outcomes Review, which looks at how the retirement income market is evolving since the pension freedoms were introduced in April 2015.

Same-sex couples should have pension equality, Supreme Court rules
Pensions Age, 12 July

In a landmark judgment, the Supreme Court has ruled that same-sex couples that are married or in a civil-partnership should have the same pension benefits as heterosexual couples.

Disposable income is on the decline
Reward, 13 July

A 2% fall in disposable income in the first quarter of 2017 arguably highlights a growing cost of living crisis, data on economic wellbeing compiled by the Office for National Statistics has revealed.

44% have left a job because of a bad boss
HR Magazine, 14 July

More than four in 10 (44%) people have left a job because of the behaviour of their boss, according to research from BambooHR.

IRESS report finds retirement income is no longer a 'one-and-done' decision
IRESS, 19 July

Retirement is no longer a one-off decision according to IRESS’ latest retirement report: ‘Staying Afloat in Retirement - Income and Annuity Perspectives’. That retirement is now typified by different stages which bring differing demands for income, is supported by the fact that fixed-term annuities now account for nearly a quarter (23%) of all quotes generated, compared to 15% at the end of 2015.

“Behavioural interventions are most effective when personalised and applied during teachable moments” says PPI
PPI, 19 July

The Pensions Policy Institute (PPI) has published its Consumer engagement: the role of policy through the life course, the final in a series of three reports on consumer engagement with pensions.

Understanding the FCA changes to pension transfer rules
Money Marketing, 20 July

The FCA has begun consulting on changes to its requirements around advice on pension transfers where clients have safeguarded benefits; in particular, defined benefit transfers. The proposals seek to recognise that the economic and legislative environment has changed significantly.

Effective governance for DC pensions
Capita Employee Benefits, 21 July

Having strong effective Governance in a defined contribution pension scheme is so important, you know we’ve seen the growth of Master Trusts in the market, we’re seeing that roadmap really pan out and I think its important that as part of that growth we really understand really invest in the Governance framework in these Master Trust solutions, they’re so important for the individual members of these schemes.

Steep decline in British people’s wellbeing
Health Insurance Daily, 26 July

British people’s sense of personal wellbeing has declined sharply over the past three years as financial pressures mount and put a strain on family health, research shows.

Absenteeism is hitting UK SMEs where it hurts
Personnel Today, 26 July

Absenteeism is having a big impact on profitability say UK small and medium enterprises (SMEs). This is according to 71% of firms questioned in a survey commissioned by HR and payroll specialist Moorepay.

Cyber security and data protection risks at forefront of pension scheme concerns
Pensions Age, 27 July

Risks posed by cyber security and data protection are at the forefront of UK pension scheme concerns, according to research released today by national audit, tax and advisory firm Crowe Clark Whitehill.

Health ‘bigger goal than financial security for over-40s’
Health Insurance Daily, 27 July

Over-40s are increasingly looking to improve their physical health but their financial security is less of a priority, research from Prudential suggests.

Retired households’ income up 14.9% since financial crisis
Pensions Age, 28 July 

The medium disposable income of retired households’ income has increased by 14.9 per cent since the financial crisis in 2008, figures from the Office for National Statistics have revealed. The medium value for retired households is £22,400, an increase from £19,500 in 2008. In contrast, the median value of non-retired households is £29,300, which is similar to levels seen in 2008, at £29,200.

Dads ‘silently struggling’ with work-life balance
CIPD, 28 July

The research, by the University of Georgia, revealed that the majority of working fathers are plagued by the stress of balancing their work and home lives, but fear they will suffer negative career repercussions or threats to their masculinity if they try to discuss it.

Why people turn to equity release for retirement income
Pensions Expert, 31 July

Statistics show equity release is becoming more popular, but is it the right answer for property owners with inadequate pension provision? The decision to put money into property as opposed to a pension plan is a contentious issue, and the pros and cons of both approaches have been long-debated. 

1.7 million pensioners now face ‘misery’ of filing tax return
Pensions Age, 31 July

One in five pensioners now have the “misery” of having to submit an annual tax return, a Freedom of Information request has found.

About the author

Gareth Davies Head of Research and Engagement

Gareth Davies

Insight Research

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