View more on these topics

Scottish Widows eyes ‘money back’ guarantee pensions

Toby Strauss, Scottish Widows
Toby Strauss, Scottish Widows

Scottish Widows is exploring the practicalities of offering a “money back” guarantee pension product as the Government investigates ways to increase security for auto-enrolment savers.

In July last year, pensions minister Steve Webb challenged insurers to develop products which guarantee members get back at least the value of their pension contributions. 

He argued that people have a “huge appetite” for certainty about their pension saving.

The Government explored how these products could be delivered in a paper on “defined ambition” pensions, published in November.

Speaking at the launch of the annual Scottish Widows UK pensions report in London last week, Widows chief executive Toby Strauss said the provider expects there to be “strong demand” for guaranteed pension products following the launch of automatic enrolment.

He said: “We have done some specific research and people who are not yet members of DC schemes would value very highly a guarantee that they will get their money back, plus the employer’s contribution and tax relief.

“We think there is a very strong demand for that sort of product, particularly among people who are not yet saving into a pension.

“The next stage is working out how you do it, which is more complicated. We need to think about how to price it and how that price would change over time.”

Webb said a paper containing more detailed proposals for defined ambition pensions will be published in the summer.

Recommended

Schroders appoints UK and European equities head to replace Buxton

Schroders has promoted head of European equities Rory Bateman to head of UK and European equities, following the departure of head of UK equities Richard Buxton. Following the creation of the combined role, Schroders’ UK and Europe value investing teams will be rolled into one ‘value’ team. Bateman, who runs four European equity funds, has been handed […]

Martin-Churchill-MM-Grey-250x255.jpg

Martin Churchill: EIS inflows remain strong

With the tax year behind us, last month we looked at how VCTs had fared in fund raising in tax year 2012/13. This month we shift the focus to look at the EIS market  The overall message is that both the VCT and EIS markets had a good year, raising funds about level with the […]

Former PFS president Jon Everill joins FundsNetwork

Fidelity FundsNetwork has appointed former Personal Finance Society president Jon Everill as head of advisory services. Everill has established several financial planning businesses during his 23 years in the industry and recently set up his own consultancy practice ResourceSuite. He quit as director of software firm Time4Advice in November. He is a director at the […]

BSA appoints replacement for director general Adrian Coles

The Building Societies Association has appointed Robin Fieth as chief executive to replace director general Adrian Coles. Fieth, who is executive director of members and operations at the Institute of Chartered Accountants in England and Wales, will take up his new role on 1 December. In January, Coles announced his decision to step down from […]

European Opportunities: 'It’s nice when stock selection results in a macro tailwind'

Amid significant macro headwinds in August, Mark Page explains why his fund’s focus on stock selection has helped it outperform a falling market in August. BESbswyBESbswyBESbswyBESbswyBESbswyBESbswyBESbswyBESbswyBESbswyBESbswyBESbswyBESbswy

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. There are already companies out there offering such an arrangement. MetLife anyone………

  2. And when people get their money back without any growth due to costs of the guarantee they will complain that pensions are a waste of time.

    And to be honest unless someone has been extremely unlucky with the timing of the markets or have invested in non mainstream investments has anyone ever not had a pension pot worth more than what they have put in?

Leave a comment