Pensions & Investment

  • Pensions & Investment

    Talk of a ‘shareholder spring’ is premature

    9th May 2012 — Filed under: Pensions & Investment

    Janet Williamson Janet Williamson

    The Government has confirmed in the Queen’s Speech that it plans to legislate on executive pay in the coming Parliament. The provisions will be included in the Enterprise and Regulatory Reform Bill, and, according to the Government, aim to ‘strengthen the framework for setting directors’ pay’. At least that’s an aim we can all agree with.

    There is practically no detail on what proposals will be included, with one exception: section 439(5) of the Companies Act will be repealed, which effectively paves the way for a binding shareholder vote on future executive pay, one of the Government’s key proposals as set out in its recent consultation. Introducing a binding vote on future pay is a sensible step which the TUC supports. However, unless shareholders exert a much tougher approach to remuneration reports than they have done hitherto, there is a danger that in practice it will have very little impact.

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  • Pensions & Investment

    Shareholders are finally exerting pressure on executive pay, but it’s not enough

    2nd May 2012 — Filed under: Pensions & Investment

    Janet Williamson Janet Williamson

    Over the past week, we have seen significant shareholder revolts on executive pay at Barclays, Xstrata and Man Group. At Aviva’s AGM on Friday another big shareholder rebellion on pay is expected.

    Yet what is notable is that despite the media portrayal of angry shareholders, a majority of shareholders did in fact vote in favour of the remuneration reports in question. When abstentions are discounted – and in law abstentions do not count towards the result – 73% of Barclays’ shareholders and 63% of at Xstrata’s shareholders voted in support of the companies’ remuneration reports. While the Aviva board may be expecting to receive a bloody nose on Friday, it is again likely that despite some significant opposition, the remuneration report will be carried.

    This is the great contradiction of UK corporate governance: shareholders have considerable powers with which to monitor companies and hold them to account, but are reluctant to use them. This leaves a dangerous vacuum that allows boards to set their own pay more or less as they wish.

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  • Pensions & Investment

    Raising the state pension age to 70+

    23rd April 2012 — Filed under: Pensions & Investment

    Nigel Stanley Nigel Stanley

    I have a piece on the New Statesman blog where I say this is unfair.

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  • Pensions & Investment

    Tax allowance freeze: The last straw for 5 million pensioners

    30th March 2012 — Filed under: Pensions & Investment

    Dot Gibson Dot Gibson

    You could tell from the way George Osborne described the measure as a mere matter of “simplifying the tax system”, that he just didn’t realise the backlash that freezing the age related personal tax allowances would cause. For around 5m pensioners who still pay tax; with incomes between £10,500 and £25,000 a year, this was the last straw.

    Set against the Chancellor’s decision to cut the tax rate from 50% to 45% for those earning more than £150,000, older people are understandably angry that they are being asked to subsidise the super rich and pay for the mistakes of the financial sector and government. Interestingly, when I was doing the rounds of TV interviews on the day of the Budget, a producer told me that they had found it difficult to find anyone willing to come on and defend the tax allowance freeze – but eventually dug up a Guardian journalist who was willing to make the case!

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  • Pensions & Investment

    Pensioners hit by tax changes, while super-rich let off

    21st March 2012 — Filed under: Pensions & Investment, Society & Welfare

    Nigel Stanley Nigel Stanley

    All those who have said that pensioners are immune from austerity measures because they vote have been proved wrong today.

    In the name of tax simplification, pensioners will be paying £1.25 billion extra in income tax a year by 2016 (p180 of the OBR’s Economic and Fiscal Outlook).

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  • Pensions & Investment

    For our new regulators, knowledge is power

    15th March 2012 — Filed under: Pensions & Investment

    Chris Leslie Chris Leslie

    When Thomas Hobbes exclaimed in the 17th century that ‘knowledge is power’ (or more accurately, ‘scientia potentia est’), it is pretty certain he wasn’t wrestling with the problem of how best to regulate the excessive behaviour of banking and financial services.

    Yet there is a gaping hole in the government’s current plans to reform the Financial Services Authority – a vacuum of information which can only be filled if we learn the lesson that we need to know the detailed facts about the real time nature of global financial data.

    Over the past three weeks I have been spending all day on Tuesdays and Thursdays with a dozen MPs trying to scrutinise the 313 pages of the Financial Services Bill in committee room 12. As Labour’s spokesperson on the Bill I have several criticisms of George Osborne’s plans to split the FSA into a new Prudential Regulation Authority and Financial Conduct Authority who will take close direction from the Governor of the Bank of England. There are deficiencies in accountability of the new regulators and a mismatch with the European supervisory authorities who can overrule them. But perhaps one of the greatest shortcomings is the regulators’ continued inadequacies in gathering data, improving transparency and ensuring timely disclosure within our financial system.

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  • Pensions & Investment

    Good pensions policy from Lib Dem Spring conference

    15th March 2012 — Filed under: Pensions & Investment

    Nigel Stanley Nigel Stanley

    All media attention (and I admit mine) were on the NHS debate at last weekend’s Liberal Democrat  spring conference. But they also adopted a rather good resolution on pensions, moved by Janice Turner – a leading light in the Association of Member Nominated Trustees and a trustee of a union pension scheme.

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  • Pensions & Investment

    DWP Select Committee says lift restrictions on NEST now

    15th March 2012 — Filed under: Pensions & Investment

    Nigel Stanley Nigel Stanley

    There is excellent news in the report from the DWP Select Committee  today on pensions. They say the government should lift the restrictions on NEST that ban transfers and impose an upper limit on how much anyone can contribute each year. No other pension scheme suffers from such restrictions, and the report shows all party support for the position long argued by the TUC, and our consumer group allies, that they were unfair.

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  • Pensions & Investment

    QE and pension schemes

    15th February 2012 — Filed under: Pensions & Investment

    Helen Nadin Helen Nadin

    The Bank of England’s decision to extend quantitative easing by £50 billion (taking the total value of the QE programme to £325 billion) is welcome, providing further stimulus to our stagnating economy. Particularly in the absence of any significant Government stimulus measures, using monetary policy to prevent a second credit crunch and keep long-term borrowing costs low, therefore boosting activity in the rest of the economy, is currently one of the most significant interventions available to support us back to growth.

    But QE is far from perfect as a means to support the recovery, with increasing evidence that bank lending remains depressed despite the additional balance sheet boost that QE is providing.  This has led many, including Monetary Policy Member Dr Adam Posen, to call for a new type of QE to be developed, which would involve the Bank of England providing direct support to small and medium sized businesses, rather than, as is currently the case, buying Government bonds directly from banks and large financial institutions. And, with no economists entirely sure what the effects of the intervention are, there is also increasing evidence that while QE has boosted confidence and growth it may in the process have pushed up inflation (by boosting demand for assets which would not otherwise have been so highly priced) which would affect those who are already the poorest the most.

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  • Pensions & Investment

    Freeze the auto-enrolment thresholds to keep women in pensions

    8th February 2012 — Filed under: Pensions & Investment

    Nigel Stanley Nigel Stanley

    The coalition government’s review of pensions auto-enrolment made two major changes to how  pensions auto-enrolment will work from the worker point of view.

    • There will be a three month wating period after someone starts a job before their employer has to auto-enrol them into a pension.
    • Instead of being auto-enrolled as soon as someone’s pay exceeds the bottom of the earnings band on which contributions have to be paid (£5,564), a new auto-enrolment trigger was introduced. This was set at the level at which people start paying income tax (£7,745). In other words as soon as your pay exceeds £7,745 you are auto-enrolled in a pension, and you and your employer both have to pay contributions on your earnings in excess of £5,564.

    The government’s consultation on uprating these thresholds has just closed. Our big concern is that the government keeps the link for the auto-enrolment trigger to the personal income tax allowance as the coalition agreement, on Lib Dem urging, says that this should rise to £10,000 a year.

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