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Normal Pension Age Update re early access to pension benefits

HM Treasury and HMRC quietly launched additional proposals on 11/02/2021 with the potential to have a much greater effect on retirement planning over the coming years.

The proposals

The main proposal is this: anyone who was a member of a registered pension scheme on 11 February 2021 (the date of the consultation) and had a right to take pension benefits before age 57 on that date, would keep that right as a protected pension age. That protected pension age (which in most cases would be 55) would be scheme specific and work similarly to existing protected pension ages. This would mean:

  • Anyone joining a new pension scheme from 12 February 2021 onwards would have an NMPA of 57 from 2028 for that scheme, although they may have other pensions that they could still access before age 57.
  • From 12 February 2021, anyone who transfers to a new scheme would lose the right to take benefits from that pension before age 57 (assuming the original scheme offered that right), unless they completed a block transfer.

One key difference highlighted between the rules for existing protected pension ages and these proposals, is that clients would not need to crystallise all the benefits within a scheme on the same date in order to keep their protected pension age.

Next steps

The timing of proposals like these is always difficult. The consultation doesn’t close until 22 April, and we don’t expect to see draft legislation from the Treasury until the summer. However, if the proposals do go ahead as they stand, transfers that take place from today could affect when clients are able to take benefits. While many people may not expect to retire at 55 or 56 (and until yesterday might have assumed it simply wouldn’t be an option), it still adds an additional consideration into people’s pension planning.

It’s still early days, and I’m sure you’ll see more about the industry’s thoughts about the proposals over the coming weeks. What seemed like a very straight forward upcoming pension change has suddenly become something to keep a keen eye on.

Our Comment

We need to see what the outcome is in the summer, but this is one to watch for those who are considering retiring early at age 55 or if you thought you might access your pension benefits, typically tax free cash, early at age 55 from 2028.

In real terms this will only be a few people, most in the UK haven’t got the pension assets they need for early retirement and shouldn’t access their pension funds too early either.

However, if you are one of the few that may have a plan to retire early or access your pension benefits early, at age 55, from 2028 you now need to be careful about any pension switching or consolidation. Let’s see what we get at the end of the consultation, hopefully draft legislation in the summer.  Watch this space.

Steve Speed


Technical content cut and pasted from Curtis Banks Technical Update.

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Restart of dealings in Legal & General UK Property Fund and the Legal & General UK Property Feeder Fund

An update received today from Legal & General about their intentions to re-open their UK property fund:

We wrote to you on the 18 March 2020 to tell you that we had suspended dealings in our property funds. We are now pleased to say that we are intending to re-open the funds. We intend the timeline for re-opening to be:

1. From 12 October 2020, 12.00 noon – you will be able to place buy, sell or switch instructions through My Account or by calling us on 0370 050 2617;

2. On 13 October 2020 – the first trading in the funds will take place at the valuation point of 12.00 noon.

3. From 13 October 2020 – the funds will be open for dealing as normal. In line with our normal procedures, we will not be able to process online or telephone instructions submitted before 12.00 noon on 12 October.

If you send us postal instructions before the 13 October, we will hold these and trade them at the valuation point of 12.00 noon on the 13 October. After that, we will deal any postal instructions at the valuation point immediately after we receive your instructions.

We’ve provided some more information below about the funds. We recommend you speak to a financial adviser if you are unsure whether this investment remains suitable for your personal circumstances, investment goals and risk appetite.

Why did we suspend dealing in the funds? Given the global COVID-19 outbreak, on 18 March the funds’ independent valuer, Knight Frank LLP, introduced a “material uncertainty clause” to its valuations of the properties held in the funds. This meant we could not be confident about the value of the properties held in the funds and the prices we set to enable you to buy, sell or value your existing investments. Without a reliable price, we took the difficult decision to suspend dealing in the funds, taking into consideration our regulatory responsibilities and the overall best interests of investors. We wrote to all investors on 18 March to inform you of this decision.

Why are we re-opening the funds? As financial markets have begun to stabilise, the independent valuer has removed the material uncertainty clause from almost all properties. We are confident that the funds now meet the following key criteria. Providing no new material issues come to light and it remains in the best interests of investors, we can re-open the funds on 13 October:

1. Material uncertainty clauses now apply to well below 20% of the properties in the funds and the risk of going over 20% following re-opening is limited

2. We are satisfied that valuations from the independent valuer remain accurate and are supported by transactions taking place in the market

3. The funds’ available cash position remains well-placed to meet investor intentions and still has sufficient cash to manage the funds

IMPORTANT INFORMATION The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. Legal & General (Unit Trust Managers) Limited. Registered in England and Wales No 1009418. Registered office: One Coleman Street, London EC2R 5AA. Authorised and regulated by the Financial Services Authority.

Having considered all relevant factors, we now consider that the exceptional market circumstances that drove suspension no longer apply and that it is in the overall best interests of investors to re-open the funds. We are pleased to be in a position where we can again rely on the accuracy of property valuations from the independent valuer. These values reflect discounts arising from the impact of COVID-19. We decided to resume trading in the funds on 13 October 2020 so as to allow sufficient time to communicate the decision to all investors in the funds in writing, and particularly to allow you to consider and potentially take advice on your investments.

Cash levels Over the course of suspension, we have proactively engaged with many investors, whilst closely monitoring and recording their intentions to hold, redeem, or add units in the funds. In view of these conversations, we believe the funds are currently well placed to pay investors who wish to cash in their investments, and retain sufficient cash to manage the Funds on an on-going basis. Currently the funds hold 26% cash, in addition to 3% held in Real Estate Investment Trusts (shares in other property funds). We will continue to engage and monitor the amount of cash we need, reviewing this up to the point of re-opening the funds.

The funds’ investments We believe the funds are well placed for investors looking for long-term investment in the UK property market. They are well diversified across sectors and geography, with property in locations we believe to be strong. The funds’ investments are currently weighted more towards industrial and alternative properties which we believe to have better long-term prospects, and less weighted to retail properties, which is currently the weakest part of the market.

Our outlook for the funds Although COVID-19 has resulted in many short-term challenges, we believe that the vast majority of this has already been felt. Whilst some sectors will take longer to recover than others, the stimuli put in place by the UK government have served to limit the damage. The funds’ investment manager, Legal & General Investment Management Limited, has many on-going initiatives which we expect to create value for investors over the short-term and we expect UK property to continue to deliver positive returns over the next five years. We believe that property is still an attractive diversifier in any balanced portfolio and is well positioned for investors with long-term horizons. We will provide further information and inform you once dealing in the funds has resumed via https://www. / our website

Not all Fund Managers are in the same position with their property funds in the UK.  A lot of ‘bricks and mortar’ funds are still suspended from trading to protect the underlying asset values for investors.

The other option is to buy a share based property fund but this does not have the same qualities for diversification, using a range of assets for volatility control/lower volatility overall.  Share based property funds correlate to typical equity funds and will demonstrate similar volatility to them.

Steve Speed


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Legal and General: Of Gilts and Gold

Please see below for the latest blog from Legal and General’s Investment Management Team regarding their ‘key beliefs’ in relation to the markets:

This week, we look at the investment case for three strategies that should in theory be defensive: holding UK sovereign bonds, owning gold, and diversifying by equity factor.

As with all Key Beliefs emails, this email represents solely the investment views of LGIM’s Asset Allocation team.

A furlough bar to clear

We have been tactically underweight UK gilts for almost exactly six months now. This has been largely based on our view that: (1) a furlough extension was inevitable; (2) negative rates were not on the cards; and (3) the distribution of potential returns was likely to be negatively skewed given those first two factors.

Thursday saw Rishi Sunak extend the furlough scheme for another six months, but the new version is considerably less generous than its predecessor. Employees must now work a minimum of a third of normal hours and employers and workers must bear a greater share of the burden. This incentivises companies to retain one full-time employee rather than two employees working reduced hours, and we believe it will result in further redundancies and pressure on household incomes in the coming months.

Meanwhile, the debate on negative rates has ebbed and flowed at the Bank of England without much clear direction. The latest hints from Governor Andrew Bailey have seen the short end of the curve price out negative rates in the near term, but the Bank’s inconsistent communication on this issue makes it hard to have much confidence in the outlook.

Given these two developments, the third argument above has become harder to defend. While we maintain a negative view on gilts over the medium term, the changing balance of risks has led us to call time on our tactical position.

Going for gold

Given its perceived status as a safe-haven asset, gold is never far from our thoughts when assessing the multi-asset opportunity set. While we maintain a positive long-term bias on the metal, we need to stay price sensitive too. Having closed a tactical overweight back in July, at current levels we believe it’s time to scale back in again.

With interest rates close to zero in most developed markets and increasingly limited space for monetary policy against an uncertain backdrop, finding candidates to diversify the cyclical nature of equities and other risky assets has rarely been more challenging. Gold is, in our view, less exposed than many assets to innovative, unconventional future measures to ease policy, and we therefore believe it offers something different from fixed-income assets in that regard.

No investment is without risk, however. Gold price movements have historically closely tracked a combination of real yields and the US dollar, but there is the possibility that this relationship could be changing. In particular, with yields pinned close to zero it could be that inflation expectations and realised inflation become the more important future drivers of fair value. Given inflation expectations have tended to behave similarly to equities, that would seem at odds with gold’s expected role as a safe haven and diversifier.

Factor fiction?

A wide range of equity risk factors (or styles) have been identified in the academic literature, yet there remain relatively few that are both compensated (i.e. deliver a positive risk premium over time) and transparent (i.e. there is a plausible and widely accepted rationale for their persistence). Five factors have historically exhibited both characteristics: value, low volatility, quality, size, and momentum.

While individual factors can go through sustained periods of relative under- or outperformance, they are likely to do so at different times, so it follows that a balanced portfolio of factor exposures should provide a diversified and cost-effective way to gain exposure to the range of equity risk premia over time.

This year has nevertheless been tough on US equity factor portfolios, largely because of the outsized influence of technology stocks. The outperformance of the largest stocks in the market-cap weighted index has weighed heavily on the returns of any diversified equity strategies which move away from the ‘tallest trees’ in the index. Some of that underperformance has reversed recently as some of the froth in tech has been removed, but we believe it is too early to call a sustained rotation in the US.

The same cannot be said of factor portfolios outside the US, however, where there is much less of a tech bias. The recent bout of risk aversion has seen non-US factors behave more in line with expectations, with quality and low-volatility stocks outperforming, while value has been relatively flat. Where we have allocated to a basket of non-US equity factors, their positive contribution has been an effective diversifier over the past couple of weeks.

Detailed and focused opinions from market leading investment managers such as Legal and General can be a useful addition to your overall view of the markets.  

Please keep reading our blogs to ensure your holistic view of the markets is well informed, diversified and up to date. 

Keep safe and well.

Paul Green


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Tax & Politics

I listened to a technical webinar at the end of last week presented by Prudential and their senior political and technical staff here in the UK.  Following the cancellation of the Budget (was this previously a pre-Budget debate?) they were discussing what taxes might change when and the politics behind it.

Basically, it is a trade-off between what value any new tax might have (how much will it raise for the State?) balanced against the potential political damage any specific tax change may do.

Thankfully, on this basis a lot of the potential tax changes were discussed and dismissed as unlikely.  I don’t think this is the end of the matter, we will need additional tax for the State to pay for the support during the pandemic and strengthen our recently exposed weak spots, the NHS, residential care, social services etc.

We will also need more money to kick start the economy and help us deal with Brexit, fudged deal, or no deal.  As this is the case, when the economy is recovering, and the consumer is spending freely again (post vaccine?) we will see changes to the tax system.

Given the state of our economy and the outlook, the only thing we know with certainty is the tax position and legislation we have in place right now.  If you have the means, why not take advantage of the tax reliefs and planning opportunities that are available today?

It makes good sense to press on with any beneficial planning now using what reliefs are available today, we know the rules now.  For example, pension funding with higher rate tax relief within the pension contribution limits we have currently.

If you would like to discuss your own personal situation, please get in touch.

Steve Speed


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Financial Advice and The Young Single Woman

Research conducted by Royal London found that people without a financial adviser were more likely to be female, single, earning around £20-£30,000, and under the age of 35. As a 27-year-old single woman, I fall smack-bang into the middle of this category and was disappointed (but not surprised) when the statement presented itself to me. After some research and a lot of self-reflection, I now feel obligated to provide an insight into the intricacies of this finding from a personal standpoint.

‘I don’t earn enough to seek financial advice.’

Talking about money does not come easily for most of us. It is a personal matter and can feel uncomfortable to discuss. Despite this, it is very important that we do talk about the ‘m’ word. At times, my perception of my own finances has made me feel that I did not earn enough money to warrant financial advice. I did not have enough self-confidence to approach a professional from the financial industry. I think my pre-disposed view of a testosterone-fuelled, overly male-dominated Wall Street had led me to believe that investing was not particularly catered towards women.

I am now aware, however, that specialised advice from a professional adviser can help me set realistic financial goals – and reach them. Ironically, my previous perception of my financial status meant that I denied myself the opportunity to strategically grow my wealth in the first place. To back this up, Royal London and the International Longevity Centre UK (ILC) found that, in the space of just 10 years, customers who had sought financial advice were, on average, £47,000 better off than those who had taken care of things themselves.

‘I don’t have time to seek financial advice.’

A young woman living in the 1950’s and 60’s was typically expected to marry, have children, and assume the role of primary caregiver. Times have (thankfully) changed and for the most part, women can now progress into further education and a career of their choice – should they wish to do so.  The ‘modern woman’ is her own person, has her own money, and can have it all. The only downside of this is that many women are required to perform a constant juggling act between family, friends, and career – often prioritising the needs of others before their own. Perhaps women of this day and age are just so busy living a full life, that they do not have time to seek financial advice?

As it turns out, we have plenty of time. On average, women live 5 years longer than men. Therefore, it makes sense for us to prepare for long-term financial stability and the best way to do this is with professional, preferably long-term, financial advice. One of Royal London’s key findings was that those who fostered an ongoing relationship with their adviser were up to 50% better off than those who had only received advice once.

‘I don’t believe that financial advice would benefit me.’

Money makes the world go round and most of us will experience ‘money worries’ at some point in our lives. New statistics from Fidelity International show that 47% of young women have had their mental health affected by financial worries, but only 12% surveyed would ask for help from a financial adviser. When I feel stressed or over-whelmed, I typically tend to seek advice from friends, family or even a work colleague. To improve my general well-being, I might go shopping, force myself to attend a spin class at the gym or perhaps even visit my GP if necessary.

This year, more than any other, has made me realise the importance of looking after my mental health. I recently realised that when I feel positive about my financial situation, I feel positive about myself. Good quality financial advice can improve emotional as well as financial well-being and the practice of sound financial planning in our 20’s and 30’s builds a strong foundation for a secure future.

And the uncertain times that we now find ourselves in makes the prospect of a secure future all the more appealing.

The year of 2020 has been challenging to say the least. Due to the Covid-19 crisis, the UK went into its first national lockdown on the 23rd March, and, by the end of April, my days had blurred into one self-isolated Groundhog Day. I had lost all sense of routine and was struggling to work productively from home. To add to this, my only form of contact with friends and family was via repetitive virtual quizzes. I was then furloughed and spent my days attempting DIY, and my nights battling anxiety caused by a looming threat of redundancy. It is now apparent that my concerns were not without rationale. New findings from the European Institute for Gender Equality and our Institute for Fiscal Studies indicate that women will be disproportionately affected by job losses as a result of the current economic conditions.

Bottom line; women have never been more in need of financial advice than they are now.

Women of the past fought for our right to vote. Today, we are still striving for equality in relation to the gender pay gap, and it now appears that we are stuck in a pensions gender gap too. Research undertaken by NOW: Pensions and the Pensions Policy Institute has revealed that women in their 60’s have an average of £100,000 less in their pension than men do. 

For me, when it comes to a lack of women receiving financial advice; the worst part of it is that this time, we have nobody to blame but ourselves. I, therefore, implore all women to seek financial advice. You may just unlock your financial potential…

Chloe Speed


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Prudential PruFund Funds Expected Growth Rate and Unit Price Adjustments Further Information

On 26/05/2020 Prudential announced Expected Growth Rate reductions on their smoothed funds and upward Unit Price Adjustments on some of their PruFund range smoothed funds.

Following these changes, I thought you would like more information and to keep it fairly straight forward I’ll focus on the key smoothed fund, PruFund Growth.

On PruFund Growth Prudential have announced an Expected Growth Rate reduction of 0.20% per annum down from 5.90% to 5.70% on pension, ISA and International Prudence Bond investments.

At the same time, while some of the other smoothed funds have benefited from an upwards Unit Price Adjustment (increase in fund value) PruFund Growth funds did not.

Why is this?

On the Expected Growth Rate (EGR)

  • The EGR is an estimate of the expected investment return over the long-term, at least 15 years
  • Prudential’s in-house stochastic asset model is used to generate a distribution of possible future investment returns (having regard to the current asset mix in each fund) over a 15 year period
  • It is preferable not to make frequent changes due to the long-term perspective

As a business we (P and B IFA) have flagged up for a while now that we expect lower investment returns for longer.  This is not a surprise as some of the key assets are producing far lower returns, cash interest rates and Government Bonds and other Fixed Interest assets.

To counter some of the lower returns Prudential have recently increased their equity content following a Strategic Asset Allocation review as noted in an earlier blog.

On the Unit Price Adjustment (UPA)

Why did the UPA not increase on PruFund Growth?  Timing was a key point.  The UPA down was applied to PruFund Growth on 17/03/2020.  For a few days after this UPA markets continued to fall.  Other ‘smoothed funds’ had their UPA a few days later, nearer the bottom for markets.

As a result, the PruFund Growth fund had further to grow back to hit the target to achieve an upwards UPA now.  The ‘smoothing’ limit for PruFund Growth is 5%, PruFund Cautious (with lower long-term returns) has a ‘smoothing’ limit of 4%.

PruFund Growth as a fund is now in a good position to either benefit from further increases in asset values or a good position should markets fall again.  Near the top of the ‘smoothing’ range without triggering a UPA.

Key Points

  • The smoothing process within PruFund is formulaic and non-discretionary
  • All versions of PruFund are operating as expected given investment market conditions
  • Where a particular version of PruFund has not yet had a positive UPA in 2020, the process should result in the fund being well positioned for any further recovery in markets


We have hit a bout of short-term volatility and although volatility has subsided a little now there is still plenty of risk in markets.  However, as long-term investors we just need to be patient and remain invested.  Markets will recover given time and so will your invested assets.

It’s also a good time to contribute to pensions and investments as asset prices are low now when compared to recent prices.  Both lump sums and regular monthly contributions will benefit you over the medium to long term.

I’ve been reviewing PruFund Growth since Prudential launched it as an investment fund in 2004.  It was interesting to see how this fund dealt with the Global Financial Crisis, stepped down in value and then stepped back up in value through a series of downwards and then upwards UPAs.  The fund worked and smoothed out a lot of volatility.

It has also delivered good average investment returns over the long term for it’s risk profile, 5/10 ‘Low Medium Risk’.

Steve Speed


Useful links:

PruFund Blog 26/05/2020:

Prudential Guide to Smoothing:      

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Prudential PruFund Growth update

Last Thursday afternoon (21/05/2020) we had an update from Parit Jakhria of Prudential’s Treasury & Investment Office (TIO).  Parit is the Director for Long Term Investment Strategy at the TIO and his role is to lay out the long-term investment views and select assets for the multi asset fund at Prudential that includes PruFund Growth and With Profits funds.  The assets managed by Parit and the TIO value at circa £170 billion.

In an investment context, long term is 10 years plus.  I often hear about the TIO focusing on 15 years.  Short term is 0 to 5 years and medium term is 5 to 10 years.  One of the benefits of the scale of Prudential’s Multi Asset funds is that they can afford to invest with a long-term focus and not be concerned with liquidity issues.  Buying illiquid assets can help generate higher returns.

Parit commented that we have had 2 to 3 decades of globalisation and now this may decline slightly, and we could move more towards regional blocks, Europe (inc. UK), US, Asia etc.  This means that it’s more important to remain globally diversified.

Prudential’s TIO follow this process for investing:

  1. Capital markets assumptions
  2. Capital market modelling
  3. Portfolio construction
  4. Strategic asset allocation

This process is really useful in uncertain times.  The TIO look at a whole range of potential scenarios and on that basis, they are relatively positive.  The modelling is done on Prudential’s own unique inhouse system GeneSIS.

How are the TIO investing?

Their equity investment overall has increased with additional investment in the UK, Asia, Japan, Global Emerging Markets, China and a new investment in India.  Fixed Interest has seen a reduction overall.  They invested in African and Asian debt and now have a new Emerging Market debt allocation too.


I was awaiting written information from Prudential confirming their thoughts as outlined on Thursday afternoon, but they tend to be a little slower in issuing a written market briefing.

From my point of view the long-term asset allocation is positive and it’s good to see it when you have spent c 16 years looking at the strength and depth of their multi asset research that they are investing for growth over the long term.

Please note that this does not mean that the short-term volatility is over.  We may still experience further bouts of short-term volatility as we deal with the virus and try and get the economy working properly again.  Other news flow will impact on markets too, US/China, Brexit Trade Deals and US politics for example.

Please note that the above is based on my notes and interpretation of what Prudential said and can not be relied on.  Investments can (and obviously do) go up and down in value.

One of the key messages we hear repeatedly is to remain invested.  This is important.

Steve Speed


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Missing Out On Child Benefit?

Royal London posted the below article last week 07/05/2020

If your income has been affected by the coronavirus pandemic, you may now be entitled to claim child benefit, without having to pay the High Income Child Benefit Charge (HICBC).

If you’re one of the thousands of people in the UK who’ve seen their income fall as a result of the coronavirus pandemic you may be missing out on Child Benefit which is a valuable source of income. 

Child Benefit explained

Households with children under 16 (or 20 if they’re in certain types of education) are eligible to claim Child Benefit. This tax year, parents will be able to claim a Child Benefit payment of £21.05 a week for the first child and £13.95 for subsequent children. This is paid every four weeks1.

Aside from the payment, registering for Child Benefit means you can receive National Insurance (NI) credits towards your state pension if you’re off work and or don’t earn enough to pay NI. You can receive these until your youngest child is 12, and your child/children will automatically get a National Insurance number when they’re 16.

What is High Income Child Benefit Charge?

The High Income Child Benefit Charge was introduced from 7 January 2013.

Since that date, couples living together where one person’s income is £50,000 or over and where a child lives with them, are subject to a specific tax charge if they continue to receive Child Benefit payments. The tax charge is worked out at a rate of one per cent of the Child Benefit money you receive for every £100 you earn over £50,000.  

This means that for anyone earning over £60,000 the payment received through Child Benefit is effectively wiped out by the tax charge. 

However, if you or your partner earns more than £60,000, it is still worth registering for Child Benefit2 (so you qualify for National Insurance credits). You can then stop (or ‘opt out of’) receiving any payments.

What counts as income?

 It’s worth pointing out that you or your partner could earn more than £50,000 and still not have to pay the Child Benefit tax charge. That’s because HM Revenue and Customs looks at what’s called ‘adjusted net income’ when working out the tax charge you have to pay. This is your pay before tax, minus any pension3 contributions deducted from your pay and any Gift Aid charity donations.



Will I qualify for Child Benefit if my income has been reduced because of coronavirus?

You may be able to claim Child Benefit again, but it will depend on your income.

For example, if you were earning £60,000 or slightly more and stopped claiming Child Benefit, but have now lost 20 per cent or more of your income under the government’s job retention scheme, your income will fall to £50,000 or below. This means you can once again become eligible to claim this benefit without being liable for the tax charge.

An interesting article, we would recommend that you check your eligibility for this benefit if your circumstances have recently changed, perhaps with a better tax position?

Even if you do not have any net gain immediately from claiming Child Benefit now you should still register for it to qualify for the National Insurance credits.  National Insurance credits will help you build up your State Pension provision.

Charlotte Ennis


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Workplace Pension Blog

Useful input from Royal London about Workplace Pension schemes.  Further clarification is expected shortly from The Pension Regulator (TPR).

It’s worth saying that this is our current understanding of the position for employers, we are expecting TPR to make an announcement about the ongoing responsibility for employers soon.

Question Answer
Can employers put their scheme on a contribution holiday?


Although TPR have not given a definitive view as to whether employers can apply a contribution holiday to their scheme, we would encourage employers if they can, to continue making contributions in the normal way.


If employers are concerned about whether they can meet their ongoing duties, we suggest they speak to TPR.


Should employers continue making pension contributions if members are off sick? Yes.  Employers will need to continue deducting contributions from the members’ salaries.  Statutory sick pay is part of the qualifying earning rules for automatic enrolment.
What should employers do if any members want to stop paying into their pension?




Members can stop/restart their contributions at any time.


Automatic enrolment rules also give employers the option of stopping their contributions.  However depending on the schemes rules for occupational pensions schemes, or contracts of employment, there may be a legal obligation for employers to continue paying them.



What should employers do if any members stop paying into their pension, but they want to continue contributions?


If the member’s contribution stops, employers will need to stop deducting contributions from their salary.


And similar to above, employers will need to check to see if there are any conditions that apply to minimum/matching contribution amounts.  And then ensure they update their schedules to reflect the new contribution

Do employers still need to make pension contributions if employees’ take unpaid leave? If the employer is not paying any salaries, then they

wouldn’t need to make any pension contributions.



If employers need to reduce salaries, do they still need to make the pension contributions? If the salary has been reduced, any pension contributions the employer makes, should be based upon the revised salary.  It’s important employers check that any reduced pension contributions are still in line with any specific arrangements they have with employees.


Can employers change the certification

basis of their scheme?



If the scheme’s contribution basis meets the statutory minimums then yes they can change the scheme’s basis.


If they decide to make the change, they’ll need to let us know as well as keep a record of this in case TPR ask for evidence and they’ll also need to let their employees.


If the employers are taking on any new employees, should they still enrol them into the scheme?


Yes.  Until TPR provide any other advice around new joiners, employers should continue to enrol any new employees into the scheme in the normal way.



If the current situation means employers can’t make their pension contributions on time what are their options?


We appreciate that current circumstances will be challenging for employers, however until TPR tell us otherwise, employers should try to make their pension contributions as soon as they can.


If employers are concerned about whether they can meet their ongoing duties, we suggest they speak to TPR.

What information is available for scheme trustees? To help trustees meet their ongoing responsibilities, TPR have issued a guidance note

Thanks to Royal London for this Q & A sheet.  Handy guidance for employers.


Steve Speed


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Transition into Retirement

One of the key areas we advise on is retirement planning, preparing for retirement, retiring and living your retirement.  As we could now live for 30 years or more in retirement it’s important to get it right.

There’s a good quote that says ‘Retirement is about waking up with enough purpose and going to sleep with enough money’.

For the transition into retirement to be successful you need to have both ‘the emotional capacity to retire and the financial capacity’.

A good transition into retirement for many is to semi-retire for a few years first.  This allows you the time to build up other interests outside of work and perhaps a new network of friends.

You need to have not just the wealth to retire but also the capacity to handle the emotional or psychological impact of leaving the world of work.

In general, people need to start thinking earlier about what comes next.  It’s useful to have these discussions years before you retire.  Understanding what you might do in retirement should help you to plan to have the means to retire (to do what you want).

Be flexible with your retirement, it’s very likely that you will change direction and you will have to adapt your original plans and keep adapting them.  Your retirement plan has to be pliable.

Quite often people either carry on working or return to work after a few months off.  This can be a retirement option for those that have the means to fully retire.  I have also had clients who have been pretty much full time voluntary workers.  The most important outcome is that you are happy with your retirement.


Think about your retirement, what do you want to do?  How will you spend your time?  Have you factored in what your partner and family want or what you’d like to do for them in retirement?

What will it cost to live the life you want to live?

Will your new life be engaging and intellectually stimulating?  Plan with your partner if you have one.

As mentioned earlier you need both the financial and emotional capacity to retire.


Steve Speed



Thought provocation from Nucleus Illuminate 06/03/2020