I’ve been given the task of writing Dalriada’s review of the year for 2015 and feel I’ve been given the short straw. 2014 was much more radical and revolutionary!
It’s a bit like music years. Take 1969. That year saw albums such as “Led Zeppelin” by Led Zeppelin, “The Band” by The Band, “The Stooges” by the Stooges, “The Velvet Underground” by the Velvet Underground , “Crosby, Stills, and Nash” by Crosby, Stills and Nash , “Mott the Hoople” by Mott the Hoople (OK, maybe the album titles lacked a little imagination but they were seminal records every one), “Led Zeppelin II” by Led Zeppelin (do you see what they did title wise there?!), and the mould breaking in more ways than just the title “Tommy” by the Who.
But 1981? OK early on we had “Killers” by Iron Maiden. But after that it was “Bucks Fizz” by Bucks Fizz (brave but ultimately futile attempt, title wise), “You could have been with me” by Sheena Easton, “Christmas Album” by Boney M, “Prince Charming” by Adam and the Ants and “Physical” by Olivia Newton John (you may have loved the video, but not the actual music, surely?).
Pensions wise 2015 felt like an anticlimactic and anodyne 1981 to 2014’s ground breaking and revolutionary 1969.
So what did happen?
Well in March we had the budget. Pensions Wise, was a flaccid synth pop affair compared to 2014’s stadium rock announcement on pension freedoms. The Chancellor did further erode the attractiveness of pensions for high earners by reducing the lifetime allowance from £1.25m to £1m with effect from April 2016, and outlined his plans for a secondary market in annuities which nobody, apart from a handful of Daily Mail readers wants. And I suspect even those Daily Mail readers won’t be that keen once they see what poor value they’ll be offered for their guaranteed payments for life.
April saw the revolutionary pension freedoms become available but there was a sense of damp ‘squibishness’ about, as the industry had not been given sufficient time to work out and implement ways of actually allowing members to take full advantage of the new freedoms. Indeed we are still playing catch up. Those that did allow it managed to incur the wrath of the Government/Daily Mail readers by making a charge.
Pension Wise was launched to make good on the Chancellor’s promise to provide everyone with free financial advice, sorry, “guidance”. As we have seen today, some advice is a little bit cheaper than the guidance costs which does make you worry about the “wise” bit.
In May we got a new pensions minister in Ros Altmann, or Baroness Altmann of Tottenham as she should be referred to as for the first time the Minister of State for Pensions sits in the Lords whilst her shadow sits in the other place.
I had help from a researcher in identifying topics for this piece and under June they have put “Unable to find any major pension news/developments for this month”. I find that slightly unbelievable, but it’s been that sort of year.
The Summer budget announcement confirmed the introduction of a new flat rate pension and the cessation of contracting out, which are both fairly important and revolutionary, but its all happening in 2016 not 2015.
Even in a 1981 there is usually one interesting-ish month and in 2015 it was October.
Ros Altmann, demonstrated that she is fast learning that politics is the art of the possible, and that sometimes what is possible is disappointing, as she effectively scrapped her predecessor Steve Webb’s big idea, the ambitious but ill-defined, “Defined Ambition” and his pot follows member reform. October also saw the start of a new state pension top-up scheme for individuals reaching state pension age before April 2016. The top-up scheme will remain open for 18 months and will offer eligible members the chance to increase their state pension by up to £25 a week for the rest of their lives. In another exciting development that same month, the National Association of Pension Funds (NAPF) rebranded as the Pensions and Lifetime Savings Association (PLSA) to attract a wider membership due to all the key developments and changes to pensions. It says here.
In November the autumn budget announcement barely mentioned pensions.
So if I was asked to summarise 2015 pensions-wise in a single word, I think that word would have to be “Meh”, accompanied by a shrug of the shoulders.
But having said that, perhaps what we need as an industry, and pension savers need as a pension savers, is a few more 1981s and a lot fewer 1969s. A period of stability that allows employers, trustees and individuals to plan for the future with a degree of certainty and an absence of a concern that if we take a particular line of action it will be rendered redundant by an arbitrary exercise of political power. That we be allowed some time to absorb and respond to some of the most fundamental changes made to retirement savings in my professional lifetime.
So whilst it makes it a bit more difficult to write an engaging and entertaining review of the year, perhaps I should be grateful 2015 was a 1981, though, to be clear, I can never be grateful for Bucks Fizz.