The All-Party Parliamentary Group (APPG) on Financial Resilience will today launch its first report – Saving, Spending, Surviving: a holistic view of people’s financial resilience during the pandemic – which recommends an equivalent to auto-enrolment to help the self-employed save for retirement.

The report, which will be presented at the house of Commons this afternoon, marks the conclusion of the APPG’s first inquiry, which looks into the impact of the COVID-19 pandemic on financial resilience.

The report’s findings are stark. It states that “vast swathes of British people, many of whom are in consistent work and actively plan their finances, are one or two shocks away from crisis”. 

As the cost-of-living deepens, the findings in the report can serve to inform policymakers. “With the benefit of hindsight there is much to be learned from the pandemic, and our report makes a number of recommendations to government based on this,” the APPG said in a statement.

The report recommends that the government should work with the financial services industry to enable the development of flexible savings products for those who may need access to a rainy-day fund but still want to save for later life.

Alongside this, the government should also coordinate an approach to improving pension saving in under-pensioned groups. This should involve an equivalent of automatically enrolling the self-employed into saving through the tax system.

The report also recommends the government should work to improve awareness and use of guidance services such as Pension Wise.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Auto-enrolment into a workplace pension is the right thing for most people but we need to think about whether the self-employed would be better served by something else. Some kind of auto-enrolment equivalent would certainly get more saving into a pension, though many may rail against locking up their money until the age of 55. Working for yourself means your income may not be steady and could come in peaks and troughs. This makes regular pension saving difficult for many.”

Stephen Lowe, group communications director at Just Group, said the report highlighted the vulnerability of a wide range of people to financial shocks and the need to encourage higher levels of financial understanding and engagement.

“The pandemic not only upturned people’s lives but has exploded the idea that people can be more relaxed about the future because automatic enrolment into pensions and the ‘pension freedom and choice’ policy means we can look forward to a comfortable old age. As the report highlights, financial problems increase the risk people will be unprepared for retirement and currently less than 40% of working aged households are on track to achieve an adequate retirement income.”

Lowe expressed his support for APPG, calling for measures to address the low levels of financial education and engagement, and in particular its support for a trial of automatically booking Pension Wise appointments to find a way of addressing persistently low usage levels.

Isio partners with CIPFA to support LGPS funds

Consultancy Isio has partnered with the Chartered Institute of Public Finance & Accountancy (CIPFA) to launch the ESG Investment Assessment Matrix for Local Government Pension Scheme (LGPS) funds to assess and manage their ESG risks.

The matrix assesses how LGPS funds’ investment managers identify, integrate and manage ESG risks and opportunities in their mandates using five key assessment criteria. These are investment approach and framework, risk management, voting and engagement, reporting and collaboration.

The matrix reports the overall ESG capabilities for each mandate and specific areas for improvement and proposes actions to inform targeted engagement with the underlying investment managers.

It also provides a numerical score assigned under each criteria, an overall ESG score and a separate climate rating score. These scores allow for aggregation to the portfolio level while aiding comparability across investment mandates, potential benchmarking of LGPS funds. Finally, the ability to track progress over time is also enabled.

Urrffa Rafiq, National LGPS lead at Isio, said: “Given the continued focus on ESG, our approach to assessing an ESG manager’s capabilities is truly independent, transparent, highlights areas for improvement and recommends refinements that will be industry wide.”

Nicholas Harvey, pensions and treasury adviser at CIPFA, added: “CIPFA has a long tradition of providing support and thought leadership to public bodies, including LGPS funds, and we believe this ESG Investment Assessment Matrix provides full alignment and transparency against the current and expected regulatory requirements.

“LGPS funds having access to a truly independent assessment of investment managers’ ESG capabilities, that sets out tangible actions, can only lead to improvements that will add value and allow benchmarking across funds. We hope this drives positive change through the industry and wider society.”

Just Group completes £500m DB de-risking transaction

Last week Just Group completed a full scheme buy-in worth £500m (€590m) with a pension scheme whose sponsor is an international industrial services business, insuring approximately 4,800 members.

This is the largest single transaction Just Group has completed since its entry into the market in 2012. The scheme has around 3,000 pensioners and about 1,800 deferred members, it was announced.

“We continue to extend and evolve our defined benefit (DB) de-risking proposition, taking the opportunity with this transaction to reinsure [around] 50% of the liabilities in the scheme. This, our second DB partner transaction, was achieved through a funded reinsurance arrangement with a new reinsurance partner and underlines the group’s commitment to grow its new business with low capital strain,” it stated.

David Richardson, group chief executive officer at Just Group, said: “As the highest single value transaction our DB business has completed to date and with the involvement of a new reinsurance partner, the deal demonstrates our capability to provide innovative solutions across the DB market.”

The identity of the plan sponsor was not dislcosed.

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