Industry expresses pension concern following Brexit vote

Industry members have expressed their concern over the future of pensions and the impact on consumers following the heavy defeat of Prime Minister Theresa May’s Brexit deal in parliament yesterday.

The uncertainty created by the extended process and indecision about when, how and if the UK will leave the European Union has caused anxiety in the financial markets.

Zurich head of retail platform strategy, Alistair Wilson, advised consumers to think carefully about how to proceed with their finances, saying: “Given the unpredictability of the current economic and political climate, people should take a moment to analyse their finances and consider the best ways to protect their money.

“It’s easy to revert to cash savings, but in the long term this can leave consumers financially vulnerable.

“Those who can afford to should consider feeding small amounts into a pension fund or stocks and shares ISA to grow their wealth in the most tax efficient way and build a comfortable nest egg.”

This uncertainty is also causing companies to start planning how they may have to tackle pension changes due to Brexit.

Analysis by the Centre for Organisational Intelligence (COI) found that 86 per cent of responding companies believed that a review into their pension scheme would be required due to Brexit.

Furthermore, 70 per cent said that they would be reviewing their pension investment strategy and 70 per cent of businesses would be undertaking a rewards and benefits review.

This sentiment was echoed by Hermes Investment Management chief executive, Saker Nusseibeh, who commented: The most important [thing] is to understand how we as a firm, and individuals, can contribute to mitigating the risks associated with any outcome to our country.

“In particular the impact on the pensioners whose capital we look after.

“Most people would prefer to see an end to uncertainty. However, the sad truth is that continued uncertainty has prevailed, and there appears to be no clear plan B.”

Despite this, some industry members believed it could create investment opportunities, including Seven Investment Management chief strategist, Terence Moll, who said: “For long-term investors this volatility does provide opportunities to buy domestic stocks – which were already at a significant discount to other markets – at more attractive levels.

“Such an opportunity should not be overlooked by anyone with a longer time horizon than the next few months.”

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