Press Releases

Commenting on expectations for Consumer Price Inflation (CPI) in December 2023 to be announced tomorrow (Wed 17^th Jan 2024), Chris Arcari, Head of Capital Markets, Hymans Robertson, said:

“Consensus expectations are for headline CPI inflation to have eased a little to 3.8% year-on-year in December, from 3.9% year-on-year in November...

IFAs need to use outcomes-based analysis as a standard part of their retirement income planning process instead of relying on averages. Without this approach they could struggle to meet new requirements in the FCA’s thematic review of retirement income advice, warns Hymans Robertson Investment Services (HRIS). HRIS further warns that reliance on averages when making assumptions could lead to an incorrect prioritisation of certain information. This in turn could result in clients facing significant shortfalls in retirement.

 Comment on the much-delayed TPR General Code laid before Parliament today.

Hopes for DC and DB Pensions in 2024 from Hymans Robertson.

DC pension members could increase retirement incomes by as much as 20%¹ if new risk sharing options were made available at the point of retirement, according to analysis from Hymans Robertson. The leading pensions and financial services consultancy says innovative change is desperately needed to solve the ‘decumulation puzzle’ facing DC members. It’s calling on the government to unlock the opportunity through two specific policy interventions: allowing providers to default members into decumulation retirement plans and creating a broader, more permissive regime for retirement risk sharing rather than focusing solely on CDC as the answer. A default retirement model would allow the industry to harness inertia and quickly gain scale for new risk sharing ideas that could deliver better member outcomes, rather than just trying to solve it through central government design of CDC.

Providers risk unnecessary operational issues, if they get caught up in the ‘AI bubble' and implement Artificial Intelligence (AI) before they’ve updated their current digital systems and processes, warns Hymans Robertson. Research from the leading financial services consultancy shows that more than three-quarters (76%) of senior leaders at insurance providers say they currently interact with AI daily and almost half (48%) even say they’re currently planning to develop their own AI for their organisation...

A number of new insurers are expected to enter the bulk annuity market, attracted by the record-breaking numbers and volumes of transactions.  New entrants give more power of choice to trustees, but also raise some questions, says Hymans Robertson.  Transaction records in the risk transfer market are expected to be broken in 2023 and the years to come.  The leading pensions and financial services consultancy emphasised that the opportunities brought by such strong demand are attracting the attention of insurers that are not already in the market.  M&G re-entered the bulk annuity market in 2023, making it the first new entrant since 2017*.

Commentary on Chancellor Jeremy Hunt's Autumn Statement 2023.

Commenting on the Chancellor's British Business Bank pensions investment plan, Alison Leslie, Head of DC Investment, Hymans Robertson, said:

“Whilst we welcome initiatives which expand the investment universe and support savers, it will take some time for the initiative to be commercially viable for many pension arrangements. Over time however we think this is a welcome addition to the universe of investments available for DC savers focusing specifically on the UK. If the investment case stacks up, like any investment, it would in time be considered as part of the investment universe but the rationale and returns have to bear fruit.”

Experts from Hymans Robertson comment on what they hope the Government will say about pensions in the Autumn Statement, especially as the Mansion House Reform consultation responses are expected to be published and TPR’s DB Funding Code confirmed:

• Overall: We hope the Chancellor is bold and creative towards forging a better saving and investment environment aligned with wider societal aims
• DB: TPR’s statutory objectives should be updated to balance security of accrued rights with current and future pension provision
• Decumulation and CDC: Government must encourage clear action from the industry to ‘solve the decumulation puzzle’ facing both DC scheme members and Trustees
• Small pots: On small pots, we prefer to see a ‘pot follows member’ model, but otherwise we support the idea of default consolidators with a central clearing house
• Trustee skills: On trustee skills, we’re keen to see the publication of the delayed General Code, and regulation and guidance to encourage effectiveness reviews
• TPR’s Funding Code: Hoping the Chancellor will provide clarity about TPR’s proposed DB Funding Code, and its alignment with the Mansion House reforms

Commenting on his letter sent today to the Work and Pensions Committee as part of its DB pensions inquiry, Leonard Bowman, Partner, Hymans Robertson, said:

"Now is the time to reflect on longer term policy strategy that would intergenerationally reconnect the UK’s immense store of pensions wealth, so it delivers pension promises, supports current workers and builds societal prosperity. There is a major societal opportunity here, which needs the right policy support and we suggest the establishment of a commission to look at these issues...

The health of UK DB schemes has reached a positive turning point, according to analysis by Hymans Robertson of DB pension schemes submitting valuations in 2022. The leading pensions and financial services consultancy’s Pension Scheme funding: Benchmarking Analysis report shows that the number of schemes in surplus increased significantly from the previous year (27% to 39%), recovery plans continue to shorten (now on average less than 6 years) and funding bases strengthen.