As CBI director-general Sir Digby Jones points out, today’s 21-year-old civil servant can retire at the age of 60 in 2044 on a generous final-salary pension – and what that will cost by then we can only guess at.Sir Digby is, of course, concerned at how difficult this will make pension reform in the private sector where it is already the number one concern for finance directors at many companies. If Johnson had stuck to the previously hinted at policy of raising the retirement age from 60 to 65 by 2013, in reality, the amount of money saved would not have been huge. It is 10 to 15 years down the line that costs would have been saved and will now be incurred because the civil service, teachers and NHS pension schemes come out of the taxes of the year they are paid. Johnson’s choice was predictable because his short-term options were so stark – face down a massive civil service strike campaign or lumber a future government with extra liability. The unions’ position was clear – we will not accept any change in the terms and conditions of our employment. In some ways, this is understandable. Who among us would want to carry on doing what we are doing for less in return? But where the Government has missed a trick is by failing to demand of the unions that, in future pay negotiations the entire package – salary plus the full estimated cost of pension provision – shall be taken into account. So, if mortality improvements mean that the entire remun-eration package goes up by more than inflation, annual pay bargains should be reduced accordingly. Civil servants can have their final-salary pensions but only as long as they are prepared to pay for them.
US-owned life office The Hartford has put together a with-profits review guide for advisers with clients in the asset class. The Hartford has consistently targeted with-profits money since launching into the UK last year. Its latest with-profits review guide includes key questions and issues to consider, template letters for approaching clients and providers and a […]
The firm says it is responding to demand for ETFs offering diversified exposure to fixed income markets, prop-erty, Eastern Europe, the Far East and emerging markets. The ETFs are listing over a three-week period on the London Stock Exchange and include funds giving exposure to the MCSI emerging mar- kets index, the MCSI world index, […]
Troubled British insurer Goshawk has agreed to the sale of its reinsurance business Rosemont Re to a consortium of private investors led by the former chairman of ACE Don Kramer, subject to terms. Goshawk admitted significant losses to its reinsurance arm following Hurricane Katrina this September.
What is clear though is that even with Bolton’s good track record, success is not going to be a foregone conclusion, explains Andrea Tryphonides
By Felix Wintle, Investment Director & Head of US Equities The most recent communication from Federal Reserve chair Janet Yellen has put the market’s sights on September as the most likely month for the first rate rise. This is due to the stronger than expected economic data of late, particularly in employment and housing, which […]
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Another investment manager offering enterprise investment schemes has alerted clients of a 10 per cent drop in value for one of its portfolios following new Mifid rules. Mifid II, which came into force on 3 January, requires firms to notify clients when the overall value of their portfolio, relative to its value at the beginning of each reporting […]
The recent enquiry by the work and pensions select committee has reignited the debate about the future of collective defined contribution schemes. Whether these sort of schemes can be incorporated into the current UK pensions landscape is a moot point. Let’s consider some of the arguments for and against CDC. First of all, it is […]
Retirement interest-only mortgages are set to become more popular following the FCA removing hurdles to selling them. The regulator sees RIO mortgages as a possible aid to the waves of maturing interest-only loans with no repayment strategy. However, the FCA also wants RIO mortgages to be sold more widely, for example as an additional option […]