Topic: Government Policy

The People’s Pension targets investing up to £4 billion into private market assets 

The People’s Pension1 has today revealed that it is set to start investing a significant proportion of the £31bn of assets it manages into private markets later this year, with a target to grow this allocation to £4bn by 2030.  

The nation’s biggest independent pension master trust says it is preparing to take its first steps into private market investment in the coming months with the imminent appointment of a Private Markets specialist and creation of a research capability. A substantial part of this new allocation of assets could be deployed in the UK, if assets are available that meet the return requirements. 

It is expected that over time The Trustees of The People’s Pension will target allocating up to 10 per cent of growth pool assets – or £4 billion2 – ­by 2030, initially in assets such as infrastructure and real estate. The Scheme has said this allocation will be dependent on it being able to access a ‘dependable pipeline’ of good quality investable assets that meet its return requirements at a fee level that leaves the benefits in the hands of members, and with the right operational structures in place.   

This latest announcement follows the £31 billion Scheme’s statement last year that it has now reached the scale to deploy meaningfully into private markets. The People’s Pension already invests 14 per cent of its members savings in UK-based assets within its growth stage default fund. 

Mark Condron, Chair of The People’s Pension Board of Trustees, said:

“What we are announcing today is a significant step forward on the path towards The People’s Pension investing in private markets, including key parts of the UK economy. 

“We are demonstrating how a responsible asset owner, operating at the right scale, can invest in both the best interests of its members and to the benefit of the wider economy in which they work.” 

Rachel Reeves MP, the Chancellor of the Exchequer, said:

“Growing the economy is the number one mission of the Government. This public commitment from one of the UK’s largest independent pension master trusts to invest here, at home in Britain, will help drive economic growth and support our milestone of improving living standards across the UK.”

Patrick Heath-Lay, Chief Executive Officer of People’s Partnership, which provides The People’s Pension, said:  

“We’re at a pivotal time for UK pensions with the government indicating a direction of travel toward scale and value for savers. As an independent £31bn master trust, without shareholders, we believe that now is the time to increase our investment in private assets for the benefit of our savers and the growth of the UK economy. The People’s Pension has a vital role to play in this exciting plan for the future of UK retirement savings.” 

Dan Mikulskis, Chief Investment Officer of People’s Partnership, said:

“As one of the fastest growing asset owners in the UK, our in-house investment expertise has grown significantly over the last 12 months and this journey will continue with the imminent appointment of a private markets’ specialist, broadening our investment reach. 

“In order for us to invest in private markets over this period it’s critical that the wider investment community, with support of the Government, provide a dependable pipeline of investable opportunities which deliver good value for our 6.8 million savers.” 

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Pensions Dashboards could accelerate losses from pension transfers beyond £2 billion

The introduction of Pensions Dashboards could see losses due to ‘poorly informed’ transfers into higher charging pensions soar beyond £2 billion before the end of the decade, leading workplace provider People’s Partnership1 has warned today.

The provider of The People’s Pension, which serves more than 6.8 million members, has shared new data from its Pension Transfer Outcomes Index2 showing losses from savers transferring into higher charging pensions will continue to rise. This trend is expected to increase once Pensions Dashboards, designed to give people an overview of all their pensions in one place, go live for the first time in two years’ time, on 31 October 2026.

New research3 commissioned by People’s Partnership has found that over 4 in 10 pension savers (42%) say they would be likely to use a pensions dashboard to move their pension from one company to another. An increase in transfers will lead to an increase in poorly informed pension transfer decisions, given the difficulties people face comparing their options, leaving many savers vulnerable to making choices that could negatively impact their financial future.

The profit for people organisation is calling for the incoming FCA Value for Money metrics to be clearly displayed on pensions dashboards. This will allow people to compare their pensions based on the information that matters most, such as the fees they are paying. This is supported by its research, which found that a simple way to compare the overall value for money provided by each of their pensions is one of the features over 4 in 10 (43%) pension savers most want to see on a dashboard, after a projection for their pension pot in retirement for over half of savers (53%).

The YouGov research also reveals that a fifth of pension savers (21%) have lost track of a pension. Half (50%) said they are likely to use a pensions dashboard to find any of their missing pensions, meaning millions could now take action on pensions previously lost to them, which could leave them thousands of pounds worse off in retirement.

Patrick Heath-Lay, CEO, People’s Partnership, said: “Pensions dashboards are a ticking timebomb for further detrimental pension transfers. Our research shows that many people find it difficult to navigate and compare their pension options due to overly complex or inconsistent information, leaving them extremely vulnerable in these types of transactions. With the arrival of dashboards, we anticipate this confusion will only intensify, making it even harder for savers to make informed decisions.

“We are very worried that dashboards will increase poorly informed decisions which lead to big losses over time. The risk is particularly severe if providers use dashboards as an opportunity to aggressively market the pensions they offer to consumers, without any way to easily compare options as we know that people don’t shop around for a pension transfer.

“It is vital that simple, easy-to-understand comparisons of value for money are on commercial pensions dashboards when they begin to go live in two years’ time, so people don’t fall victim to offers that seem better than they are and make decisions which they later regret. A simple consumer-facing value for money framework should apply to all pensions, not just relatively low-charging workplace options. Urgent action is needed to stop people from losing thousands of pounds and having to work for years longer before they can retire.”

People’s Partnership has previously revealed5 that nearly three quarters (72%) of people who had recently transferred a pension didn’t know exactly what the fees were for their new or old pension, and one in 10 (11%) didn’t think their new pension had any fees.

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People’s Partnership appoints Director of Public Affairs

People’s Partnership, the leading workplace pension provider, has appointed Victoria Jonson as Director of Public Affairs to further strengthen the organisation’s voice and profile with policymakers and the wider business community.

Victoria will join in November from the British Business Bank, where she is currently the Senior Director of Public Affairs, managing the Bank’s relationships with Ministers, parliament, trade bodies and think tanks. She has previously worked for a number of trade bodies including R3 – the Insolvency and Restructuring Trade Body, where she won a number of industry awards.

People’s Partnership provides of The People’s Pension, to 6.7 million savers, which is one fifth of the UK workforce, and is the nation’s largest commercial provider of defined contribution workplace provider.

Commenting on her appointment, Victoria said:

“I am delighted to join People’s Partnership at such a crucial time for pensions policy, during which we hope to work alongside the Government to drive changes that deliver greater value for savers.”

“This is such a unique business – a not-for-profit with strong values and purpose which has already done so much to help its members become financially stronger. I am looking forward to the many exciting challenges ahead.”

Patrick Heath-Lay, Chief Executive Officer of People’s Partnership, said:

“Victoria’s vast experience will be instrumental in further developing our influence and collaboration with Government, regulators and industry stakeholders. She will also play a key role in helping to raise awareness of our socially driven purpose to a wider audience.”

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People’s Partnership calls on new government to provide roadmap for pensions

People’s Partnership, one of the biggest providers of workplace pensions in the UK, has said it hopes the new Government’s promised review of pensions will create a roadmap for the industry.

The Labour Party, which has returned to Government after a 14-year absence after winning the General Election, made a manifesto promise to launch a review of the nation’s pension system if it took office.

Patrick Heath-Lay, Chief Executive of People’s Partnership, which provides The People’s Pension to more than 6.5 million people across the UK, said: “A change of government is an opportunity to think creatively, with pace, about the future of pensions in the UK. I hope that Labour’s pensions review will help revitalise the consensus that drove forward the success of automatic enrolment and create a roadmap for the future.

“It’s crucial that government and the pensions sector can work constructively to enable greater pension fund investment in priority sectors, while ensuring the interests of pensions savers are at the heart of decisions.

“It would also be welcome if there were a Pensions Schemes Bill in the King’s Speech, as there is a need for legislation on value for money and on small pots consolidation that should not wait.

“There are also ‘day one’ challenges for the new Ministerial team. The pensions dashboard programme is making progress, but Ministers must address key project documents which still require approval, and this must happen quickly if larger schemes are to connect to the dashboards’ infrastructure in April.”

Before the election, People’s Partnership issued a four point plan for fairer pensions for savers, which can be found here.

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Parents of disabled children could be £138,000 worse off in retirement

Parents of disabled children could have £138,000[1] less in their pensions if their caring responsibilities prevent them from returning to work, according to analysis from leading workplace pension provider, People’s Partnership[2].

The provider of The People’s Pension to 6.7 million people across the UK calculated the impact of caring for a child with a disability on parents’ ability to save for retirement. It found parents of disabled children who return to work part-time are £89,000[3] worse off than parents who are able to continue working, while those who take a career break to care for a disabled child and receive a pay cut when they return are £55,000[4] worse off in retirement compared to a normal working parent.

Meanwhile, further research from the not-for-profit company found that just under two thirds (64%) of parents of disabled children are worried about their future finances, according to new research from People’s Partnership[5].

In a survey of more than 2,000 adults, it found more than a quarter (27%) of parents in the UK have at least one child with a long-term health condition, impairment or illness – impacting millions of families across the UK.

For those parents:
• Over half 53% of non-retired parents are not confident that they’ll have enough pension savings to live the lifestyle they want in retirement.
• Just one in ten (11%) parents of disabled children feel adequately supported by the Government or charities in caring for their children.

While the Carers’ Leave Act, which was became law in April, introduced five days unpaid carers’ leave, People’s Partnership is calling on employers to create the flexibility and workplace culture that allows parents to balance caring and working. It is also calling on the pensions industry to implement better access to financial planning resources and more robust support systems to help close the pension gap for parents with disabled children.

People’s Partnership has a Financial Wellbeing Hub[6] , which includes information for carers and works with a specialist organisation to help people, including carers, get back into work after a period of time away. It is calling on employers to implement flexible working policies, internal support groups and leave policies that are similar to maternity and paternity policies, but for parents of disabled children, to better support carers in their careers.
Nicola Sinclair, Head of Responsible Business at People’s Partnership, said:

“There is a dire need for more comprehensive support structures for parents caring for children with long-term health conditions. Better access to financial planning resources and robust support systems would help relieve some pressure on this forgotten group of people, but further action is needed if we are to avoid another pension gap widening further.

“While flexible working policies offer some relief, tailored support, rather than box ticking, is crucial for long-term financial security and improved retirement outcomes. It’s vital that employers who don’t follow the new flexible working laws are held accountable. We need to develop resources tailored to these employees who care for a disabled child, with a focus on combating stigma and creating more inclusive workplaces that allow them to remain in and return to employment. Our research shows that some parents of disabled children are facing poverty in retirement unless things change dramatically.”

Richard Kramer, Chief Executive of the national disability charity, Sense, said:

“The research highlights the stark reality for parents of disabled children, who face significant financial hardships due to their caregiving responsibilities.

“At Sense, we see firsthand the challenges these families face. Very few parents, who are struggling day to day, will have the luxury of thinking about retirement. So, it is little surprise that they’re at such a disadvantage when it comes to saving.

“Local and national government must commit long-term resource and funding to support families. And employers must do their bit too – creating more supportive environments with improved flexible working policies.

“We need to show that we value these incredible individuals in our communities.”

People’s Partnership undertook additional qualitative research and, through interviews with parents of children with disabilities, who were able to work, it found that reduced earnings through lack of career progression, having to take a lower paid part-time job, and often only having one household income; significantly hampered parent’s ability to save for their retirement[7]. However, often this is not the case, and parents are unable to return to work due to the demand of care.

The link to the report, which was commissioned and overseen by Fern Healey, Executive Business Partner at People’s Partnership, as part of her sponsored Master of Business (MBA) development. The report can be found here: Pension inequality – parents of disabled children | People’s Partnership (peoplespartnership.co.uk)[8]

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CASE STUDY
Maria Cook, aged 47, from Crawley, has a 15-year-old son Ryan, who is profoundly Autistic. Maria has been his full-time carer since birth, meaning she has been unable to return to work. Prior to having Ryan, Maria previously worked at Gatwick Airport as a Contract Manager for ICTS UK Ltd and then as a Duty Manager for G4S, from who she received a pension.

She said: “I grew up in a household where from a young age my father drummed it into me how crucial it was to save into your pension to set you up for retirement. With the amount of hours Ryan requires care, the Carers Allowance received from the DWP works out to something like 48p an hour, which has meant I haven’t been able to pay into my pension. Having a child that needs support for the rest of their life, combined with rising living costs and skyrocketing mortgage payments has meant my previous hope of a comfortable retirement will remain a distant dream.”

While some parents with disabled children find part-time or Carers Leave measures helpful, these measures are still unpaid. Maria thinks employers need to be doing more to help parents with disabled children.

She says: “A lot of employers, unless carers themselves, don’t understand the challenges carers face on a daily basis. Even parents who have support from their employers still struggle as there’s still so much stigma around being a carer. I think employers could be doing a lot more to better support carers, for both financial and emotional wellbeing.”

People’s Partnership outlines its plan for a fairer deal for pension savers

People’s Partnership, one of the UK’s leading providers of workplace pensions has today outlined what it thinks the nation’s future political leaders can do to make retirement saving fairer for savers.

The provider of The People’s Pension to 6.7 million people, has issued a four-point plan which it believes will help improve the retirement prospects of Defined Contribution savers, including the 11 million who have started saving through automatic enrolment since its launch in 2012. It believes that whoever wins the General Election on July 4 should consider its proposals, which it believes would put savers at the heart of pensions policy.

The not-for-profit provider is calling for political leaders to commit to:

  • A target retirement income. Too many people are not on track for an adequate pension in retirement. Government should set out target pension incomes, to be achieved through a combination of the state pension and workplace pensions saving. Without clarity over what the combination of state pension and workplace pension saving should achieve, it’s impossible to say what the level of either should be. Clarity is critical to helping UK savers plan for their future.
  • Competition should work in the interests of the saver. People’s Partnership supports measures to help judge whether or not pensions offer value for money. Regulatory policy should encourage healthy competition on the things that drive good outcomes for consumers. Too often competition is opaque and unhealthy, focused on brand and marketing. There should be transparent and standardised value for money metrics that enable anyone to make objective judgements about pensions and these should cover the whole market. These should focus on the outcomes that savers are likely to receive from pension saving. They should be front and centre on pensions dashboards.
  • Pension market reform. Building scale pension schemes should be a priority. Large, well governed schemes will offer economies of scale. They should offer better value to savers and be able to invest in a wider range of asset classes, helping deliver politicians’ ambition for pension schemes to invest more in UK illiquid assets. Larger schemes, held to a new quality standard should be enabled to sweep up the small pots that have proliferated as a result of automatic enrolment. These schemes should be the core of a more consumer-oriented market.
  • Economic role of pension funds. Politicians of all parties are right to focus on the role of pension funds as investors in the UK economy. This focus should not come at the expense of savers, who need the best possible return from their invested pension savings. Any policy to increase UK pension funds’ domestic investment should place the interests of savers at its heart. 

Patrick Heath-Lay, Chief Executive Officer, of People’s Partnership, said: “As a profit for people provider that looks after retirement savings of a fifth of the UK workforce, as well as being an organisation that was set up for social good, we are committed to standing up for savers. Although workplace pension saving has come a long way in the past 12 years, the system still doesn’t work in the very best interest of savers.

“We believe that, if implemented by decision makers, our four-point plan would go a long way to improving workplace pension saving for millions of people.”

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Automatic enrolment changes could add £105bn to young adults’ pensions over 50 years

The Government’s decision to extend automatic enrolment to workers aged between 18 and 21 could mean an additional £105bn of pension savings for younger people across the UK over the next 50 years, according to new analysis by People’s Partnership1, which provides The People’s Pension to more than 6.5 million people across the UK.

Following the passing of a new Bill in Parliament last year, automatic enrolment, which has seen nearly 11 million people start saving into a pension since 2012, is set to be extended to workers aged between 18 to 21 by the mid-2020s.

The analysis2 by People’s Partnership reveals that additional pension contributions of £400m per year for 18-21-year-olds will result in an additional £105bn of savings, over the next 50 years, when all returns, fees and further contributions are factored in.

Impact of the automatic-enrolment extension – an example:

  • An 18-year-old with a salary of £15,0004 who contributes 8% to their pension will have £4,900 saved by the time they reach age 22.
  • The amount will add an extra £33,900 to their pension by the time they retire at age 68.
  • This calculation doesn’t factor in wage growth and compounding of additional contributions, so the total amount added to the pension as a result of saving earlier could be much higher.

The not-for-profit pension provider, which reinvests its profits to benefits its members is calling for cross party agreement, with the support of key unions and trade bodies, on a timeline for implementing the vital reforms.

Phil Brown, director of policy at People’s Partnership, said:

“The earlier you can save into a pension the better as it means your money is invested for longer and has more time to benefit from growth in investment markets. So, the Government’s commitment to help younger workers start saving for their future is a huge step forward. But now we need to see promises turned into action, with a cross-party consensus on the timeline for delivering this change, given we have been waiting for this since 2017.

“Automatic enrolment is undoubtedly one of the most successful Government policies in living memory, enabling millions of people to save tens of billions of pounds extra into their pension. It’s absolutely right that the policy continues to develop so that it reaches its full potential and enables as many people as possible to have the opportunity to benefit.

“With nearly 4 in 10 people3 not saving enough for their retirement, the next big challenge for policymakers and the industry is reaching a consensus on how we solve the problem of under saving.”

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Plans to improve retirement options for savers welcomed

Plans to improve retirement product options for savers have been described as sensible by People’s Partnership1, which provides The People’s Pension to more than six million people across the UK,

Commenting on Government proposals to improve access to decumulation products for Defined Contribution savers2, Phil Brown, director of policy at the provider of the UK’s largest master trust

Speaking after the deadline for the consultation closed, he said: “As the typical automatic enrolment saver gets older, we think it’s crucial that the decumulation options for these workers are significantly improved.

“Although more details are required, there are real potential benefits from the proposed reforms from the Department for Work and Pensions. At face value, the evidence suggests that a strong steer towards a suitable product may improve decision making for a significant proportion of defined contribution pension savers.

“We see a framework in which people are free to take money from their defined contribution pension savings via a good quality product as a sensible plan. Automatic enrolment has been a tremendous success over the past decade, but it’s vital that these 11 million savers are able to easily access their savings when they need to.”

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Consolidator proposal the right way forward to help tackle small pots problem – People’s Partnership

People’s Partnership1, which provides The People’s Pension to more than six million people across the UK, has today given its backing to the Government’s proposal to create consolidators2 to deal with the growing small pots problem.

In a Government consultation, the Department of Work and Pensions (DWP)-proposed a framework would enable a small number of authorised schemes to act as regulated consolidators for deferred pots under £1,000. In its response, The People’s Partnership agreed that this is the best solution to tackling a problem which has seen millions of small, dormant pension pots created since the introduction of automatic enrolment in 2012.

The provider of the UK’s largest master trust, believes that the consolidator option will help build the scale required to enable pension schemes to invest in less liquid assets, as outlined in the Chancellor of the Exchequer’s Mansion House speech in July. It also supports the proposal to use the value for money metrics, which the Government wants to introduce to the defined contributions pension market.

However, People’s Partnership has warned that there is a vast amount of work to do over the next six months to operationalise the framework.

Commenting, Phil Brown, director of policy at People’s Partnership, said:

“The growing number of small, deferred pension pots has become an increasing concern for the industry, and we are pleased that the DWP has offered a solution which works in the interests of savers.

“Our main reason for support of this proposed solution is that it will hold consolidator schemes to a higher regulatory standard, which will only improve outcomes for savers.

“From an operational perspective, the core processes needed to make consolidators work are very similar to the processes needed to make pot follows member work. There is also an opportunity to learn from the dashboards project. While there’s a lot of detail to work through, the consolidators proposal looks achievable and no harder than anything else that was on the table. With the policy direction now set, it’s now up to the industry to make this work.”

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Minister for Pensions visits offices of People’s Partnership

One of the UK’s largest workplace pension providers, People’s Partnership1, today (May 18th) welcomed the Minister for Pensions, Laura Trott MBE MP, to its offices in Crawley.

During the visit, the Minister, accompanied by Crawley MP Henry Smith, met with employees of the not-for-profit organisation, which provides The People’s Pension to more than 6 million people across the UK.

Commenting on the visit, the Minister for Pensions, said: “It’s been great to see the work People’s Partnership do to help people build strong financial foundations for their lives.

“For many people, a pension is the most significant financial investment they will ever make, which is why it’s so important that Automatic Enrolment has transformed UK pension saving, with more than 10.8 million workers enrolled into a workplace pension to date – many for the very first time.

“It’s also why we are supporting proposals to expand Automatic Enrolment even further, enabling millions more people to save more and to start saving earlier.”

Following the tour, Ms Trott spoke with the Chief Executive Officer, Patrick Heath-Lay, to discuss a wide range of current issues impacting the pensions industry, and how to ensure people across the UK are able to save enough for their retirement.

Commenting, CEO, Patrick Heath-Lay, said:

“We’re delighted that the Minister has found the time in her busy schedule to visit our offices to see, first hand, how we routinely put our six million members first. It’s great that she was able to meet with our colleagues in departments such as customer services, who gave her an insight into some of the issues they assist our members with on a daily basis.

“As an organisation which was founded to help people to build financial foundations for life, we were keen to discuss with the Minister what can be done to build upon the huge success of automatic enrolment. Workplace pensions are one of the most effective ways to boost the nation’s financial resilience and it’s vital that as many people as possible are able to save enough for their futures.”

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