• Home
  • Admin/Tech
  • Benefits
  • Buzz
  • DB
  • DC
  • Diversity
  • Investment
  • Law & regulation
  • Risk reduction
  • Events
  • Whitepapers
  • Spotlights
  • Digital Edition
  • PPTV
  • Newsletters
  • Sign in
  •  
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
    •  

      You are currently accessing ProfessionalPensions via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: [email protected]

      • Sign in
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • YouTube
  • Register
  • Subscribe
  • Events
    • Upcoming events
      event logo
      Investment Conference

      This two part Investment Conference will bring you the latest updates from economists, asset managers and pension consultants. We will be taking a look at the outlook for the 2021 economy, alternatives, cashflow strategies and global equity markets to name a few, assessing how they fared through the volatility and what we can expect for the year ahead.

      • Date: 29 Jan 2021
      • Digital Conference
      event logo
      Webinar: What to put on your GMP Equalisation project roadmap for 2021

      This webinar will bring together views from actuaries, lawyers, administrators, trustees and data experts to look at the pragmatic, collaborative solutions that are open to schemes to solve the GMP equalisation challenges in 2021. It will assess the individual challenges schemes face with equalisations and provide some practical options that are available to resolve these issues.

      • Date: 02 Feb 2021
      • Webinar
      event logo
      Webinar: Will the world return to normal in 2021?

      In this webinar, PP editor Jonathan Stapleton will be joined by BMO’s chief economist Steven Bell and director of fiduciary management, Christy Jesudasan, alongside PTL trustee director Melanie Cusack and Isio’s head of fiduciary management oversight Paula Champion to discuss the significant impact of these themes on the pensions sector.

      • Date: 04 Feb 2021
      • Webinar
      event logo
      Webinar: Investing for the transition to net-zero

      Pension schemes are now facing increasing government, regulatory, and member demand to manage the financial risks associated with the anthropogenic consequences of the environmental crisis. But how best to manage this transition to net-zero? And, in the rush to invest in carbon friendly assets, are investors potentially missing out on potential returns generated by the transition theme, investing in assets that may not be carbon neutral but have the potential to significantly improve their environmental credentials over time. This webinar will discuss at the transition theme, look at the opportunity set available and ask how this can help schemes achieve superior returns while moving towards a net-zero portfolio.

      • Date: 11 Feb 2021
      • Webinar
      View all events
      Follow our Professional Pension Events

      Sign up to receive email alerts about our events

      Sign up

  • Whitepapers
    • How DC schemes can gain exposure to different asset classes in a low-return environment

      So far, DC plans have largely been focused on the onset of auto-enrolment and changes to the regulatory framework - be it the ‘charge cap,' ‘pension freedoms' or consultations around ‘value for money', says Annabel Tonry, Executive Director at J.P. Morgan Asset Management (JPMAM).

      Download
      Pension freedoms three years on

      In 2015 George Osborne, then the UK Chancellor of the Exchequer, decided that those age over 55 could take much more of their pension in cash. This has since opened up a range of possibilities for DC scheme members in the world of pensions.

      Download
      Find whitepapers
      Search by title or subject area
      View all whitepapers
  • Spotlights
  • Digital Edition
Professional Pensions
Professional Pensions
  • Home
  • Admin/Tech
  • Benefits
  • Buzz
  • DB
  • DC
  • Diversity
  • Investment
  • Law & regulation
  • Risk reduction
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
  •  

    You are currently accessing ProfessionalPensions via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: [email protected]

    • Sign in
  • Industry

Next UK rate rise will be in 2018, says industry

Most expect the BoE to raise rates again in 2018
Most expect the BoE to raise rates again in 2018
  • Michael Klimes
  • Michael Klimes
  • @ProfPensions
  • 15 November 2017
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
0 Comments

Respondents believe another rate rise is question of when, not if.

This week 95 respondents took part in Pensions Buzz and answered questions about when they think the next interest rate rise will be and whether the UK needs a Later Life Commission to craft policies on how retirement and social care will be funded. 

To see the results click here.  

Related articles

  • Aberdeen transport fund completes £230m LGPS buy-in with Rothesay
  • Government outlines climate risk governance and TCFD reporting changes
  • Advice is better than guidance, says Guy Opperman
  • CMI: 5,000 excess deaths for week two of 2021

alt=''

An overwhelming majority (84%) said the Bank of England (BoE) will raise the base rate at some point next year.

It comes after the central bank raised the interest rate by 25 basis points to 0.50% earlier this month, and expects to introduce another two rises in the next three years.

The remaining segment  of respondents was evenly distributed, with 2% saying rates will rise this year, 3% said they will increase in 2019, 2% believed they will go up in 2020, 3% said later than that, while 6% did not know.  

One commentator explained the hike is dependent on a number of factors.

"If retail sales peak over the Christmas and New Year period, it may come sooner rather than later," he said.

In early 2018, rates will go up by another 0.25% which will take the steam out of inflation but also increase the number of repossessions, another argued.

A different respondent said: "The lack of wage inflation means that the bank must tread carefully with the economy still in a fragile state."

Among those who chose ‘later', one said: "Get used to being in a low interest-rate environment."

alt=''

Investment consultants should take the lead on driving up disclosure of investment costs and charges, according to 75%.

It was argued that since they manage the interaction with fund managers on behalf of trustees in many cases, it is natural they should lead on this.

However, others said it was the job of additional stakeholders to support consultants in this work.

"Not solely, but they should because it is in the interests of their customers, and they could because they can bring the combined weight of customers to bear," said one.

Another added: "They have a vital role for transparency of total costs and charges."

However, 14% disagreed, and one respondent even said "there is no need to drive up disclosure of investment costs and charges".

Another added: "Many individuals invest without reference to investment consultants. The industry should lead the way for its customers."

One in nine was undecided.

alt=''

There needs to be an international regulatory approach to cost and charge disclosure, 47% said.

International co-operation to ensure markets work efficiently and are transparent is vital, it was argued.  

A pundit said: "Good question. That would make sense as investment is a global business."

Even after Brexit, investors will need protection and recourse irrespective of where the company is located, another commented.

Yet some support for an international regulatory approach to cost and charge disclosure was qualified.

One respondent said it is a long-term aim and another thought it is unlikely to happen soon.

Conversely, 37% suggested the approach does not need to be international with many concerned about complexity.

"Any such approach would come with overly complex requirements - regulators can't avoid overdoing their tinkering," said one.

Another asked: "Trying to get everyone to agree? And just try to get Brussels to agree to anything intelligent these days."

One in six was ambivalent about an international approach. "Beware what you ask for! Regulatory solutions tend to tick boxes and can be an expensive way to further reduce value," said one.

alt=''

The benefits of defined contribution (DC) pension scheme pooling are being oversold according to 45% of respondents.

Just because a pension fund is small, does not mean it is badly run or members have worse experiences relative to those in larger schemes.

"It's the administration inefficiencies that push costs up for small schemes, not the investment charges," said one.

Another added: "One size does not fit all. Having a much bigger pot does not stop it from collapsing. If that should happen then it will take a lot more members with it!"

A different commentator noted a consequence of DC pooling "will be much pain and poverty for all too many".

Nonetheless, 26% believed the benefits of pooling are not being overhyped. "Well-run master trusts can be much more efficient than trust-based DC schemes," said one.

Collective defined contribution has a real future and needs to be retrieved from the political long grass, another said.

Almost 30% were undecided.

alt=''

There should be an independent ‘later life commission' to develop a national strategy for financing retirement and social care, according to 56%.

Currently politics is too polarised and there are too many silos across government departments for successful solutions to be developed.  

"I don't like [the idea of] yet another quango, but this is an issue of enough national importance to make it sensible," said one.

Another said: "A large majority of retirees would benefit from being spoon-fed on the management for their retirement assets not least to avoid very high fees in most cases."

Just over a quarter (26%) rejected the idea, and one asked: "Another pointless and expensive quango staffed by professional do-gooders? No thanks!"

Coupling retirement and social care suggests a policy of funding social care from retirement funds, another remarked.

Among the 1% who chose ‘other' one said: "There should be a commission. But it can never be independent of all the interested parties. And it can only ever be expected to be advisory. Even ‘develop' is going too far."

One in six said they did not know.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Industry
  • Pensions Buzz
  • BoE
  • interest rates
  • later life commission
  • investment consultants
  • disclosure

More on Industry

It's official: Advice is better than guidance, says pensions minister
Advice is better than guidance, says Guy Opperman

Work and Pensions Committee

  • Industry
  • 27 January 2021
The number of excess deaths registered in England and Wales in the second week of 2021 is around 5,000, according to the Continuous Mortality Investigation (CMI).
CMI: 5,000 excess deaths for week two of 2021

The number of excess deaths registered in England and Wales in the second week of 2021 is around 5,000, according to the Continuous Mortality Investigation (CMI).

  • Industry
  • 27 January 2021
Just 12% of prospective users felt the need for more formal financial advice
High pre-retiree support the FCA's investment pathways initiative

More than 60% of pre-retirees supports the Financial Conduct Authority’s (FCA) investment pathways initiative, according to research by Legal and General Investment Management (LGIM).

  • Industry
  • 27 January 2021
Have your say: Do you support a 'Living Pension' accreditation to help low- to middle-income earners?

In this week's Pensions Buzz, we want to know whether you support the introduction of a ‘Living Pension’ accreditation to help low- to middle-income earners.

  • Industry
  • 26 January 2021
The pairs will be matched appropriately to add value to the mentees’ specific chosen area
PMI launches expanded mentoring and development programme

The Pensions Management Institute (PMI) has launched an expanded mentoring and development programme, following a successful pilot project.

  • Industry
  • 26 January 2021
blog comments powered by Disqus
Back to Top

Most read

L&G agrees £400m deal with own scheme
L&G agrees £400m deal with own scheme
Mark Stocker dies following cancer battle
Mark Stocker dies following cancer battle
PLSA unveils six policy board appointments
PLSA unveils six policy board appointments
Boohoo acquisition of Debenhams leaves schemes with PPF
Boohoo acquisition of Debenhams leaves schemes with PPF
Think tank floats Aviva-backed lower income-focused retirement target framework
Think tank floats Aviva-backed lower income-focused retirement target framework
Trustpilot

 

  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • YouTube

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading