Against the backdrop of a longstanding UK pension crisis, the RSA has been working in partnership with APG and ATP to investigate what a fairer, cheaper and more accessible private pension system could look like. Our Tomorrow’s Investor reports draw upon 2 years of research to argue for a radical change to our pension system.
Collective Pensions in the UK
Previous reports and findings
|Seeing through the British Pension System|
Purchasers of personal pensions are being misled about the level of hidden costs and charges, the RSA's year-long investigation into the pensions industry has found. The report found that 21 out of 23 providers denied there were any additional charges other than the annual management charge (AMC) and administration costs. It uncovers how those selling pensions fail to reveal what is charged for such items as audit and custodial costs, and other hidden costs including taxes, stock lending fees and broking commissions. The enormous impact of fees, where an extra 2 percent annual charge can, over the lifetime of a pension, result in a halving of pension benefit, is not understood by individual consumers or by small employers, the report concludes.
|Building the consensus for a People’s Pension in Britain|
Following two years of research, 'Building the consensus for a People’s Pension in Britain' describes what a "best practice" pension system would look like. It calls on the coalition government to build a broad cross party consensus in which political parties, employers, unions, and pension funds agree to implement a ‘pensions architecture’ that brings the UK in line with countries such as Holland and Denmark that enjoy the lowest levels of pensioner poverty in Europe.
|Pensions for the people: addressing the savings and investment crisis in Britain|
In this report, 'Pensions for the people: addressing the investment crisis in Britain', the RSA concludes that although the Government’s policy of auto-enrolment and personal accounts represents a big opportunity for UK savers, the scheme must be extended to cover pension payments above £3,600 if it’s going to have a major impact. By limiting pension payments to £3,600 many savers across the UK will be forced to open private pensions that often charge exorbitant costs (often up to 40 percent of the value of their pension).
|Survey findings: Urgent need for accountable, trustworthy and transparent investments|
Tomorrow’s investor launched the 'Pension Initiative' survey to establish an understanding of the critical behavioural change being witnessed in the financial industry. It identified current problems as well as high expectations for the future of fund management.
|Paper: Producing decent returns for pensioners in turbulent times |
A paper by Sir John Banham, 'Producing decent returns for pensioners in turbulent times' blames the poor performance of the UK fund management industry on Britons’ propensity for risk avoidance, ‘little Englander’ attitudes to investment fund allocation, and ineffective regulation for. The paper urges institutions to put themselves in the shoes of their ultimate client: people saving for retirement.
|Tomorrow's Investor report and expert papers|
The final report of the RSA’s Tomorrow’s Investor project combines the findings of its research with analysis of the pensions industry. The report concerns itself in particular with costs and charges levied on pension plan members. It also looks at methods of improving transparency and accountability and at improving investor engagement, and suggests a new way of reporting costs and charges. It argues that pension funds should take more advantage of the resources at their disposal by utilising new methods of social engagement.
|Tomorrow’s Investor interim report|
Twenty-five ordinary investors took part in the Tomorrow’s Investor deliberative forum in July 2008. They took part in discussions and listened to presentations from experts in the field. The results show increasing levels of concern about indirect investments, pensions in particular. They also show how disengaged investors are from the management of their own money.