October 1, 2023

Despite a shorter week following the Bank Holiday, the pensions industry has been kept busy, with various industry research, two new pension consultations, and a High Court judgement that could impact millions of savers.

Many organisations have also been busy working to submit their responses to the Pensions Dashboards Programme’s (PDP) consultation on dashboards standards, which closed on Tuesday (30 August), prompting calls for “extensive” user testing before the standards are finalised.

But as one door closes another opens, and the same may be true for consultations.

As concerns over the NHS workforce persist ahead of winter, the Department of Health and Social Care (DHSC) launched a consultation on plans to extend changes to the NHS pension scheme to allow retired staff to retain pension benefits if they return to the workforce.

While the easements were initially introduced as part of the response to Covid-19, the consultation is looking to extend the measures until 31 March 2023, in an effort to “support and boost” the NHS workforce ahead of a challenging winter and put the system “in the strongest possible position to tackle the pressures and bust the Covid backlogs”.

The Department for Levelling Up, Housing & Communities (DLUHC) also launched a consultation on plans to require Local Government Pension Scheme (LGPS) administering authorities (AA) to asses and report on climate-related risks, in line with the Taskforce on Climate-related Financial Disclosures (TCFD).

Within the pensions industry however, concerns over the potential impact of the cost-of-living crisis have continued, with LCP urging savers to only lean on their pension savings “as an absolute last resort”.

Yet Standard Life argued that savers will need strike a balance on short- and long-term financial commitments, pointing out that those starting pension saving at age 22 could have £112,000 more at retirement than those starting at 27.

Industry research has also prompted calls for further action, after revealing that ‘millions’ of pension savers are not saving enough for retirement.

Despite these adequacy issues, industry concerns over the need to get the message right amid the cost-of-living crisis persist, with the PLSA warning that attempts to improve retirement saving may need to wait, with most savers facing ” far more immediate financial concerns than pensions” amid rising energy and food bills.

There is reason to be optimistic though, as recent research from Ortec Finance found that the vast majority (98 per cent) of pension scheme managers think their scheme is well hedged against inflation.

In addition to this, industry research published over the past week revealed that DB pension schemes’ health have reached a new high, while further analysis showed that the average DB funding level has reached the highest point since the current funding regime was introduced in 2005.

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