The end of 2022 was marked, as the end of every year is, with a reflection of the past year, and the thought of new possibilities in the upcoming 12 months.

However, the start of the year seems to prove true that the more things change the more they stay the same, as many of last year’s biggest challenges still remain, such as the cost-of-living crisis.

This week, the Pensions and Lifetime Savings Association (PLSA) revealed that the minimum living standard had increased by nearly 20 per cent causing many across the industry, such as People’s Partnership, provider of The People’s Pension, director of policy, Phil Brown, to call for reform to auto-enrolment.

This increase in the minimum living standard was also reflected in research published by Hargraves Lansdown which reported that 39 per cent of people were not confident that could afford to retire, an increase of 5 per cent on the year before.

It was additionally revealed this week that the crisis could hit divorced people particularly hard as over a quarter of people reported that they could not cope in retirement without their partner’s pension, thereby making the role of pensions in divorce proceedings particularly important.

However, industry research published this week also revealed that more pre-retirees are considering annuities for the first time in preparation for their retirement with almost one million pre-retirees considering the retirement product.

Another one of the enduring legacies of 2022 that seems to be sticking around are the issues see around liability-driven investment (LDI) and the subsequent inquiry on the subject, with the Government Actuary's Department also weighing in on the Work and Pensions Committee's ongoing inquiry into this.

The Office for National Statistics (ONS) also confirmed plans to publish estimates on the proportion of pooled investment vehicles (PIV) invested in LDI pooled funds by defined benefit and hybrid (DBH) pension schemes.

Legal claims relating to LDI are also expected to become a reality in the year ahead, although legal experts have warned that this will take "a long time to play out", with "no easy road" for those considering LDI-claims.

In the DC space, meanwhile, TPR issued guidance this week encouraging support for DC savers impacted by this recent volatility, particularly those in lifestyle funds, highlighting the need for trustees to help savers understand whether the strategy they are in is appropriate and consistent with their plans for retirement.

It was not all bad news, however, as industry experts made the prediction that 2023 will be a “red hot” year for the insurance market after the reveal that the aggregate surplus of defined benefit (DB) pension schemes rose to £376.7bn at the end of December 2022.

Although the new year has recently been rung in, this past week was more about continuity than change. Yet whilst there has been plenty of struggles and challenges left over from last year that will continue to need combatting in the weeks and months to come, there has been some good news and some hope on the horizon.

Share Story: