defined benefit pension schemes

DB Schemes Not at Risk



Posted on: 28th October 2022

The Pensions Regulator (TPR) has taken steps to reassure savers that their defined benefit pension schemes (DB) are safe and secure following the various media sources promoting their imminent collapse in the face of the Bank of England’s gilt market intervention.

Safe From ‘Collapse’

Whilst the media no doubt fuelled the concerns for sensationalism, TPR chief executive Charles Counsell drew a line under the false reporting of market meltdown and disaster to assure savers that they are not at risk. Although there have been liquidity issues in some funds, the schemes are safe from collapse risk.

The media jumped the gun concluding that pension schemes were in trouble after hearing about liability-driven investment funds undertaking some emergency arrangements. Counsell stated that the regulator and trustees had a duty in ensuring members of the DB were not afraid and making split decisions that may come back to haunt them.

The regulator remains vigilant to the risks and requests that trustees do the same and plan accordingly, following website-posted guidance for all parties.

Scared Into Wrong Decisions

With rising inflation, energy bills, and mortgage payments driving up household costs, some savers are starting to feel that they can no longer afford to pay into their pensions, with others dipping into their pension pots to help pay bills.

The immediacy of the economic trouble and their destabilising frequency make a potent mixture, ones that make quick decisions without thinking of the long-term effects they will have. The importance of saving for later life can easily be swayed by a wrong report provided by sensationalism.

The importance of getting good advice from someone more certified to provide financial guidance is therefore essential to protect your retirement plans.

Reducing or ceasing pension contributions is not something that makes a lot of sense as the short-term benefits are small for what will amount to a long-term consequence. If savers believe they have no other alternative, it is time to talk with independent financial advisers Cheshire to look over the overall plan and strategise a better way forward.

Consult With Experts

With so many swaps in the government, mini budgets and crises in many aspects of the UK landscape currently, it can be easy to be swayed from your overall retirement planning Cheshire. With forces out there that can easily leave out the facts about what your financial future looks like, it pays to have people with inside knowledge of the market on your side.

Contact the team at Haven IFA today for more information on defined benefit pension schemes and pension advice Manchester.