What will 2020 hold for pensions?


Happy New Year! 2020, which I can’t help thinking should be called the “Year of the Cricket”, marks the start of many great things – one being that the Brexit backlog may well be coming to an end.

With a general election behind us and the UK set to leave the EU in a few weeks, whilst there will still be much to do, Government should be able to turn some of their attention to business as usual.

Here’s my pension predictions for the New Year…

The latest Pension Bill has progressed slower than a herd of snails traveling through peanut butter, however 2020 should see this finally pushed through. Key points include introducing a framework to allow a new type of pension scheme, called Collective DC; new powers for the Pensions Regulator as well as a way for a Pensions Dashboard to be made available online, where individuals can view all of their pension savings together. These are all positive moves for the industry and I’m hoping Government does their bit to push this through.

The markets, however, hold less certainty for me.

Interest rates remain low and there is little sign of uplift, which is bad news for companies with Final Salary pension schemes and those looking to buy an annuity. With some political certainty removed we may have a smoother ride for UK investments in 2020, however according to UBS, 72% of investors describe the investment environment as more challenging than it was 5 years ago.

Managers will always skew to tell a positive story and any upside on growth assets next year will need to offset liability changes, so sponsors should remember to look at both sides of the story.

Knowing where you need to get to and having a risk managed practical strategy to get there is key – and if you need help with this. Ask!