abrdn sponsored report outlines two parallel 'crises' in UK pensions and capital markets

05 September 2023

Think tank, New Financial, has published a report focusing on the parallel ‘crises’ in UK pensions and capital markets. The report provides in-depth analysis into these two key issues facing our economy and society. We have co-sponsored the report with Citi, with forewords from our CEO Stephen Bird and Citi’s EMEA CEO David Livingstone. You can read Stephen’s foreword below.

Foreword by Stephen Bird

The shortcomings in UK retirement provision are well recognised: an ageing society with high dependency on the state; growing intergenerational inequality as defined benefit schemes are no longer available; emerging disparity between public and private sector provision; serious gaps in coverage for the self-employed; and finally, patchy private retirement savings with too many people not saving enough or, worse, not saving at all.

The challenges facing UK capital markets are a more recent phenomenon but now high on the political and policy agenda - and rightly so. Vibrant capital markets are vital to attract the domestic investment on which our future prosperity depends. As important, their international competitiveness is essential to the health of our economy and, consequently, through tax revenues generated, the funding of public services.

Having spent much of my career in the Far East and US, I have seen a variety of approaches to funding retirement and building successful capital markets. It is therefore encouraging to see these two issues now being considered in conjunction in the UK.

While the UK’s immense pool of pensions assets is evidence of our historic success in giving people financial security, we must now build a framework for retirement provision that reflects both a very different economy and employment model. Our future fiscal sustainability is dependent upon getting this right.

Finding sustainable solutions to these challenges requires a boldness of political vision and consensus - as happened with the much-copied introduction of auto-enrolment workplace pensions. It also requires pragmatism and a mature risk/reward mindset from regulators.

The New Financial team has produced a thought-provoking report based on careful analysis evidenced by diligent research. Through the prism of ‘putting the saver first’ it progresses the debate on how to address some of the biggest challenges facing our economy and society, even if some potential solutions may not be to everyone’s liking. I very much hope that it is received in this spirit.

You can access the full report here.

Our CEO, Stephen Bird, has shared his thoughts in this blog.