Turning 65 in the U.K. used to mean mandatory retirement and a future of endless holiday. But in 2016 it has come to signify a very different cut-off: membership in the single most pro-Brexit age group in the June 23 European Union referendum.

About 60 percent of Britons 65 and older voted to leave the world’s largest trading bloc in the recent vote, the most of any age group, according to two separate exit polls. The glaring irony is that senior citizens are also the most reliant on pensions, which face a worsening funding gap since the Brexit vote.

The combined deficits of all U.K. defined-benefit pension schemes, normally employer-sponsored and promising a specified monthly payment or benefit upon retirement, rose from 820 billion pounds ($1.1 trillion) to 900 billion pounds overnight following the referendum, according to pensions consultancy Hymans Robertson. Since then, it has grown further to a record 935 billion pounds as of July 1.

Continue reading (Bloomberg) →

UK pensions will face more risks due to Brexit, it has been warned. Spurred on by low gilt yields, pension deficits climbed to a record £935bn in June, bringing on a mass of complications for defined benefit (DB) pension schemes.

Nigel Green, founder and chief executive of deVere Group, said that “companies not putting enough into pensions” was a factor in further exacerbating pension deficits.

Gilt yields fell below 1 per cent last month for the first time in history, driving up transfer values and putting more pressure on pension schemes in the process.

Continue reading (FT Adviser) →

If any good has come from the misery that has unfolded at Tata Steel and BHS, it is that their troubles have helped to shine a much-needed light on the pensions timebomb that is ticking across corporate Britain.

Thousands of companies, public and private, big and small, are weighed down by the burden of growing pension scheme black holes, and for some the load is life-threatening.

The Tata and BHS debacles have sharpened the minds of politicians as experts warn that Britain now faces a very real pensions crisis, with several schemes close to collapse unless serious steps are taken to address the growing problem.

Senior MP Frank Field is so concerned that he has promised to investigate the pension system, a move that could see the bosses of the firms most at risk forced to explain to Parliament what plans they have in place to ensure workers’ retirement schemes are guaranteed.

Continue reading (The Telegraph) →

BRITAIN must get out of the EU to protect pension pots and prevent the creation of a federal tax system, voters have been warned.

Edi Truell, former chairman of the London Pension Fund Authority and founder of the Pension Insurance Corporation, has said that he is backing a Brexit to protect British pensions.

His stark warning over the terrible cost of staying in the EU comes amid further revelations that Brussels wants to take control of the British tax system with a European tax code imposed across the 28 member states.

Mr Truell, now chief executive of Disruptive Capital Finance but who was in charge of one of Britain’s biggest public sector pension pots covering 130,000 people and with £18 billion worth of assets, said that Brussels will demand “15 times the entire British defence budget” from the UK when it takes control.

Continue reading (Daily Express) →

Two countries have half the world’s retirement wealth. Britain has only one fund in the top 50 – but the BBC nearly makes the top 200. Andrew Oxlade offers lessons from the top 300.

Reports on the pensions industry can be dull and are easily overlooked.

One such study published last week attracted few headlines yet offered wonderful insights.

The world’s 300 largest pension schemes, a study put together by Towers Watson, allowed for interesting conclusions to be drawn on who owns the world’s retirement wealth – and what that says about how each country will meet future pension costs.

First, I was surprised that only one British scheme made the top 50: BT Group which has accumulated $68bn to ensure it can pay employees past and present sufficient retirement income.

The next biggest British pensions were the Universities Superannuation Scheme, with big banks’ and utility companies’ schemes close behind.

BT may have only just made the top 50 but lower sections of the list were loaded with UK pensions.

Continue reading (The Telegraph) →

People trying to access their pensions under government reforms are complaining that many pension providers will not give them their money.

The changes mean that anyone over the age of 55 should be able to get cash out of their pension, subject to tax.

But some companies are not allowing savers to withdraw repeated lump sums from their pension pots.

Others will not allow their clients to cash in the whole pot – and cannot promise to do so in the near future.

Terry Fletcher, a 65-year-old former salesman from Surrey, said he had been unable to withdraw cash from a pension pot.

He said that the company involved – Zurich – told him it was not possible to take any money out.

“All I want to do is draw it as cash,” he told the BBC.

“It was all excuses. But you can’t get access to your money. It seems the government came out with these proclamations, but when you try and do it, there are a number of stumbling blocks.”

Continue reading (BBC News) →