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The state pension has been in the news a lot lately with much moaning about the delayed payment of pensions to women of a certain age and different levels of payment to men and women of a certain age.

The Women Against State Pension Inequality (WASPI) argues that women born on or after 6 April 1951 to 5 April 1953 were informed too late in the day that their state retirement age was increasing, leaving them little time to re-plan for their retirement.

Then there was the recent annual rise in the state pension of 8.5% (matching wage growth which was higher than the two other measures of either inflation or 2.5% – the so-called triple lock). While this was the largest many have seen, it is not being uniformly applied over all those in receipt of the state pension. Individuals who reached retirement age before 2016 are in receipt of the old style state pension comprised of two elements: the basic state pension (based on national insurance contributions) and the additional state pension (based on earnings and benefit claims). The shortfall arises because the triple lock rise only applies to the basic state pension. The additional element only rises by inflation ie 6.7% and not the 8.5%.

Of course, no-one should be relying on the state pension – on its own it will support only a fairly impoverished retirement. The state pension should be considered just one element of one’s income in retirement.

While the state pension has always been relatively egalitarian, amounts of private and company pensions often vary for men and women. Statistically men tend to have bigger pension pots than women. According to research from Legal & General, the pensions gender gap starts initially at 16% but ‘can double by the time women reach their 40s. By the time they’re in their fifties it could be 51% and finally when they reach retirement their pension savings could be 55% smaller on average’ than their male counterpart.

Many people may not have had access to a company pension or their wages have been too low to build up a meaningful private pension. Some may have not had long enough in the work force to save adequately. Common reasons for the disparity in pension pots between men and women include the fact that women are or were more often those at home looking after children or other dependents.

The latter situation could be the same today. But with the introduction of auto-enrolment meaning individuals have to actively opt out of a company pension, the argument of no access and no employer contributions wanes – although not for those under age 22 or earning less than £10,000 per year.

In the financial year 2022-23, 0.8% of workers opted out of their workplace pension scheme, according to The cost of living crisis hasn’t helped. Without nannying too much employers need to highlight to their staff importance of staying invested in a company pension – it is not just the employee contribution, but the employer contribution and the ‘free money’ of the tax relief applied on contributions.

The state pension system is devilishly complicated and only the government can change that! Now is the time for a campaign by the government to explain how it works, how the employer pension system works, how private pensions work – frankly how pensions work so that, come every individual’s retirement they have a pension that does work.

Stephanie Spicer is head of content, Quill PR

Photo by Francesco Gallarotti on Unsplash

Several Quill clients were successful at the recent Investment Week 25th Investment Company of the Year Awards 2023, in association with the AIC, at an awards ceremony in London.

The awards recognise managers which have delivered consistently for investors across a variety of sectors.

The shortlists for the awards were constructed using scores provided by the AIC, using Morningstar data. Investment companies needed a three-year track record to 30 June 2023 to be shortlisted and a market cap of £50m or above.

Within each sector, companies had their cumulative fair NAV returns calculated over three discrete periods in sterling terms. Returns over the 12 months to 30 June 2023 were given a 40% weighting, the 12 months to 30 June 2022 were given a 30% weighting, while the 12 months to 30 June 2021 accounted for 20% of the overall score. The final 10% weight was given to the full cumulative NAV return over the three years to 30 June 2023.   

These scores were added to give a single score out of 100, the highest of which were considered for the shortlists.  Winners were then chosen by a judging panel comprised of IFAs, wealth managers, fund managers and analysts considering qualitative as well as quantitative factors.   

Odyssean Investment Trust (OIT) won the UK Smaller Companies award.  Alliance Trust (ATST) was the Global award winner and AVI Global Trust (AGT) was highly commended in the Global award category.

Investment Week said: “Against a challenging backdrop, our judges this year were keen to highlight consistent performers who have managed to navigate turbulent market conditions. Discount management was a major focus this year, as well as effective communications with investors and use of the investment company structure.”

Photo: Gregor Stewart, Chairman of Alliance Trust, and Craig Baker, WTW’s Chief Investment Officer, receiving the award

It was confirmed the following day, that the BBC story that Rishi Sunak’s government would be rolling back some of its net zero commitments, including the ban on sales of new petrol and diesel cars being pushed back from the proposed 2030 to 2035, and a delay in phasing out gas boilers, was correct.

The leak and subsequent government announcement of a slowing of the pace to targets, comes on top of what, while the title of this article may seem hyperbolic, is not far from the truth after the summer many have experienced this year. Here in the UK, we were met with the typical British gloomy summer of wind and rain, whilst our European and American counterparts have been met with drastic extremes.

It was recorded that July was the hottest average month on record, with many parts of southern Europe reaching unbearable temperatures of 50 degrees. Accompanying these temperatures were raging wildfires, devastating large areas of Italy, Greece, Croatia, Canada, and Hawaii. These events should be ringing the alarm bells louder than ever on the effect that climate change is having; with the destruction of agriculture, homes, and threatened health of locals, with deteriorating air quality and insufficient infrastructure.

While the effects of climate change are more urgent than ever, it seems that in 2023 ESG funds are now facing the effects of global markets, and ESG may not be at the top of every fund’s lists.

Reuters reported in August that ESG investments have been out of favour with UK investors, with a staggering £1 billion in funding having been pulled since May because of continued interest rate rises and persistent inflation, leading investors to seek more stable grounds for returns.

Figures from global funds network Calastone show that the amount investors sold of their ESG funds snowballed to a total of £1.96 billion by the end of August. This has also been reflected by consumers, with The Telegraph reporting that the ‘number of people making decisions with a ‘’planet first’’ mindset nearly halved from 24pc to 13pc between June 2022 and April this year’.

Once the front runners of global change with the momentum of the Paris Agreement in 2015 behind us, seemingly, under Rishi Sunak’s government, matters of ESG in the UK have taken a back seat. While we need to ensure our own energy supplies in light of the Russian war on Ukraine, the new North Sea oil licenses that Sunak has approved have faced huge backlash from both members of his own party and environmental groups, urging him to look at renewable energy sources – with Sunak claiming that it is “entirely consistent with our plan to get to net zero”. 

While Sunak was widely criticised for his move, London Mayor Sadiq Khan hasn’t fared much better at the other end of the spectrum of ESG matters. The controversial ultra low emission zone (ULEZ), aiming to improve the air quality in London, with vehicles not meeting emissions standards being charged £12.50 a day, or a fine, has seen Khan suffer a drop in popularity given that the charges are hitting those who are unable to either pay the charge or afford to get a car that is compliant.

Sunak says the government is still committed to reaching net zero by 2050 but in a “more proportionate way”, however it is increasingly evident that the UK is struggling to find the right balance between the needs of its people and achieving its net zero targets.

Emma Taylor is account executive at Quill PR

Photo by Matt Palmer on Unsplash

As interest rates rise again, those coming off fixed rate mortgages and looking down the barrel of a premium hike of hundreds of pounds and those facing the cost of living ‘heat or eat’ options, must be despairing. With families cutting out essentials, not to mention pension savings or luxuries to fund the cost of living, it is little surprise that financial and health protection insurances will be cut also.

In the six months to January 2023, 13% of adults or 6.2m people who had held insurance or protection policies in May 2022 cancelled at least one of their policies and/or reduced the level of cover on at least one of their policies specifically to save money due to the rising cost of living, according to the Financial Conduct Authority’s Financial Lives Survey.  23% of policies cancelled were life cover, 10% critical illness, 9% private medical insurance (PMI) and 5% health cash plans.

Protection has for ever been regarded as a bit of a luxury item – life insurance just about gets accepted but for income protection, PMI and critical illness insurance – advisers constantly struggle to get the message about the importance of such cover across at the best of times. Or if they do get the message across, persuading clients to take out policies (and pay for the premiums) is another hurdle too few manage to get over.

It shouldn’t take a crisis in the NHS to push the argument for PMI but it should help. But does it? For some, affordability might well be an issue. So, it behoves us to look to company supported PMI. Or to look to the much overlooked (as often considered the poor relation) health cash plans. Significantly cheaper, these still provide cover for many of the health services we all use at some point: dental and optical costs, physiotherapy. Employer sponsored health cash plans are a large chunk of the market, and could be considered a good investment in employee healthcare and maintenance.

Laing Buisson, the independent sector healthcare market data provider agrees that: ‘As we look to the future, the private health cover sector faces two contrasting drivers. On one hand, limited access to NHS dentistry and the growing wait times for NHS treatment continue to fuel the demand for private health cover. On the other hand, the decline in disposable household income, expected to persist into 2024 and beyond, acts as a counter-driver of demand for private health cover.’

Who knows what the answer is, but it calls for individuals and their advisers to find the best way possible to prioritise and secure what protection insurances they can for themselves and to review the level of cover they do have as soon as they are able to adjust to provide meaningful cover in the event of losing income or suffering poor health.

Thankfully providers are seeing the potential from obligations under the FCA’s new Consumer Duty standards to protect consumers and require firms to put customer needs first.  

Siobhan Barrow, UK Distribution Director at Royal London said: Protection insurance can be often overlooked but the Consumer Duty will change this, moving it from a more transactional sale to become a much more integral part of the holistic advice conversation.”

Stephanie Spicer is head of content at Quill PR

Photo by Craig Whitehead on Unsplash

There are four problems zipping around currently that could be marshalled into a very good solution: how to encourage the young to invest; how to encourage investors to invest in start-up, small companies and UK plc generally, how to encourage pension schemes to do the same, and how to encourage companies to list on the London Stock Exchange and base operations here.

Each issue carries its own hurdles.

Investing is not top of many young people’s lists – spare cash is not that readily available – and yet the attraction of cryptocurrency offers excitement it seems and the potential for fast or vast profits. If cryptocurrency is attractive, this suggests the young are prepared to take some risks with their investing – so let’s try to educate them about things which could be deemed ‘exciting’ but are more tangible, i.e., small company, start-up, tech, entrepreneurial businesses looking for funding.

Pension funds have a lot of money to invest but for various reasons are not investing in less liquid and more risky assets and very often also not in the UK. Calls are being made to change this mindset although it has to be borne in mind that broadly this pension money sits under two sets of policy: defined benefit schemes, which guarantee the pension member their pension and defined contribution schemes – which don’t. For the latter each individual can choose their level of risk. If that individual has forty or fifty years to invest over, why should they not consider the potential growth options which stem from scale-up businesses?

That’s always supposing UK businesses see a future in the UK. Lots don’t because they see the opportunity for better valuations elsewhere and lots of companies that would like to come and list in London and present opportunities for investors don’t, because of regulatory restrictions. Citing the problems British fintech company Revolut has had in getting a full banking licence in the UK, Professor Stefan Allesch-Taylor, entrepreneur and Professor of Practice at King’s College London recently wrote: ‘Why do we care about the toings and froings between a multi-billion-pound UK fintech company and our regulators? Simply because other companies considering London as a home will be watching the process, whatever the outcome.’

Pictured above, Nicholas Lyons The Lord Mayor of London, head of the City of London Corporation (until his term ends and he returns to his role as chairman of Phoenix Group) in its report Powerful Pensions Unlocking Defined Contribution capital for UK tech growth March 2023 has written: ‘If we want to keep firms here in the UK, we need to make sure they can get the investment here in the UK.’ And he proposes this is facilitated by a Future Growth Fund: ‘Such a fund would enable investment via private equity into fintech, life sciences, biotech, and green technology. By channelling this investment, we can create growth and in turn support jobs and prosperity across the whole UK economy,’ he writes. He proposes the investment comes from the defined contribution pension schemes.

All the hurdles to these issues have the same root – that of risk. Regulators, businesses, investors have to work together to calculate that risk and then make a calculated risk, to benefit all.

Stephanie Spicer is head of content at Quill PR.

Photo courtesy of City of London Corporation

World Environment Day 2023 (5 June) celebrating its 50th year turned its attention to one of the largest pollutants in the world, plastic.

Within the last decade, plastic production has increased rapidly, amounting to roughly 400 million tonnes per year, a figure which is foreseen to double by 2040 . Researchers estimate that 12 million tonnes of plastic ends up in our oceans each year. These figures alone are shocking, not helped by the current turbulent social and economic backdrop globally, and pushback against ESG regulation proposals (particularly in the US).

However, through the actions of the United Nations, the tide might finally be turning on plastic pollution.

In March 2022, at the resumed fifth session of the United Nations Environment Assembly, the Intergovernmental Negotiating Committee set out a historic resolution to end plastic pollution and forge an international legally binding agreement due by 2024, of which all 193 UN member states have signed in favour for.                                                                                                       

Earlier this year, the United Nations Environment Programme (UNEP) released a report ahead of the second round of negotiations in Paris (29 May – 2 June). It set out the roadmap for solutions to beating plastic pollution and creating a circular economy, highlighting the need for governments, companies, and markets to come together to create deep rooted policy and regulation.

The roadmap has three simple, yet key targets needed to make the shift towards a circular economy.

Alongside the prospect of a renewed, thriving ecosystem, there is also a significant economic and societal opportunity. The roadmap proposes that by 2040, industries could save up to $1.3 trillion; currently a staggering $2.2 trillion goes towards virgin plastic production. Also supporting societal needs, it is projected that there will be 12 million new jobs, as a circular economy requires a larger human workforce, compared to the current linear economy.

Emma Taylor is Account Executive at Quill PR

Photo by tanvi sharma on Unsplash

A job in PR: I’ve been working at Quill PR for just over six months as an Account Executive – not where I would have imagined myself a year ago. I finished a degree in Fashion Branding and Communication at Birmingham City University in July 2022, the tail-end of the pandemic, when the continuous lockdowns and uncertainty left me searching for inspiration as to what to do in my post-graduate life. My course had touched on the topic of PR, and even though it was in the context of fashion, I knew a career in PR could be an interesting one; so, when the opportunity to work at Quill came up, I took it.

Not only am I new to the corporate world, but also to financial services, so I’ve to learn about the inner workings of a successful business, and about a completely new sector. My anxieties about this have eased over time as I’m surrounded by a team of experts always open to answering my basic questions and to guide me in the right direction. My first week in the office coincided with the announcement of Liz Truss’ Autumn mini budget- showing me just how quickly the markets can become volatile, seeing the full impact of macro events on the economy (something I hadn’t thought much about before).

What am I enjoying – or not enjoying?

Meeting and getting to know the clients and journalists that we work with has been a positive experience; all I’ve met so far have been lovely, and very welcoming (and patient while I’m still learning the ropes!). I’ve also enjoyed attending client events, my favourite being an F1 arcade session! It was a great opportunity to meet journalists and fund managers in a more relaxed environment.

However, meeting lots of new people in a relatively short time frame has been quite overwhelming for me; as someone who is naturally reserved, I’ve found it difficult to talk to new people. While it’s been a struggle with my confidence, I know that it will be something that I will get comfortable with over time.

Is it what I expected?

Honestly, I didn’t know all the role would entail, aside from fulfilling the admin, social media, and reporting duties. It’s been great to handle things like press enquiries and be trusted to carry them out for clients and having the support of the team if I need help or reassurance. From the start I’ve been able to be hands on, going to meetings to observe and learn about our clients and building relationships with journalists.

Is financial services fun?

Yes! I’ve never doubted that it was before I joined, but I was always slightly daunted by how vast and complicated the industry seemed. Even though there are still a lot of things that I haven’t got my head around, I feel more confident with my finance knowledge. I’m looking to doing a basic training course on financial services so I can better my understanding, and make my job somewhat easier!

What have I learnt?

You need to be organised in PR, as you can get requests in at any time, from the team, journalists, or clients. You need to be flexible when prioritising workload depending on incoming deadlines; when a client wanted a last-minute report for the following day, being flexible with my priorities at that time was crucial.

Write everything down; so many things can be happening at once, you can’t remember everything! So, key notes when meeting with a journalist, taking minutes during a client meeting, and any information about clients.

To really engage with clients and journalists – remembering a favourite restaurant when arranging a meeting and information about themselves; it’s all about building relationships and trust.

I’m excited to continue my career with Quill – the continued support from the team has helped my transition into a job in PR to be a very comfortable and secure one.

Quill PR is delighted to mark the momentous occasion of the Coronation of His Majesty King Charles III and his ascension to the British throne.

We wish all our clients, friends and families a happy celebratory weekend.

Much has been reported in recent months of companies de-listing from the London Stock Exchange and de-camping to the US for better valuations of their businesses. And yet the UK has its champions and investors should perhaps consider the positives and buy more British.

One advantage for UK investors is that companies remaining listed in London are seen as cheap – and these are not companies which are doing badly – it is just that they are often under appreciated.

Alec Cutler, portfolio manager and head of multi-asset at Orbis Investments (pictured) says: “UK names keep popping up as being super cheap. We find that they’re good companies, they might need a tweak here or there, but they’re fantastic yet selling at very cheap prices. So they offer high dividend yields, high free cash flow yields, very solid book, and cheap book values.”

Examples, he highlights are Headlam, energy players Hunting, Drax and Balfour Beatty, the latter he says “one of the best positioned construction companies in the world, selling at a double-digit free cash flow yield, eight times earnings.

“The reason these companies are cheap is because of changes to  pension reform in the UK. UK pension holdings in UK equities went from approximately 50% around 1997 to 4% today, a massive outflow of money. And the current prices reflect the fact that investors around the world just don’t know these names as well as they should, and as well as we think they will.”

Examples of a company which wants to forgo its London listing and one which might like to list here, are Okyo Pharma and Coinbase, respectively.

Gabriele Cerrone, founder and chairman of biotechnology company Okyo Pharma, which specialises in eye disease treatment, is taking his company out of the UK and his issue is not so much valuation as appreciation.  Quoted in the Daily Mail he says UK investors are only interested in mining and oil giants – “What I learnt about trying to create a niche biotech company in the UK is that it is like trying to grow plants in the desert. It has been a complete waste of time and we never raised money from investment banks. There’s no biotech culture nor any liquidity in the United Kingdom at all.”

In its Notice of Intention to delist from the London Stock Exchange, Okyo said:The Company has decided to request the voluntary cancellation of listing as the volume of trading of the Ordinary Shares on the Main Market is negligible and does not justify the associated costs.’

Meanwhile crypto exchange Coinbase may not be averse to the idea of a London listing given dissatisfaction with the clarity of crypto regulation in the US.

Brian Armstrong, co-founder and chief executive officer of Coinbase told BBC Radio 4’s Today programme, when asked if he would have considered listing on the LSE rather than New York: “We started in the US so it was natural for us to list there but honestly given the UK has recently actually been quite positive on crypto, in a different world going back we may have considered it, to be honest at this point. I do think the US risks falling a little bit behind here if some of the regulators don’t engage further with the industry and create that clear regulatory environment that will remove some of these clouds.”

Then we have statistics from The Insolvency Service showing that the number of corporate insolvencies was 16% higher in March than in the same month last year.  Yes, there is a cost of living crisis but when we do spend and where are we spending? Not on these businesses, it seems.

One has to consider where, as investors we are focusing. Who does crypto currency investing benefit and who benefits from biotech investing? No one is suggesting one invests in the latter for philanthropic reasons alone – there are returns to be made after all. But is investing in something that can’t be seen, rather than in something that develops treatment for inflammatory eye diseases, somewhat myopic.

Stephanie Spicer is head of content at Quill PR

There has been much focus, not least in the recent Budget, on older people (sorry to those over age 50 but that’s where the definition starts) returning to the workplace.

Workers over 50 who have left the workplace have done so for a variety of reasons; the lucky ones because they can afford to and the unlucky ones because they are ill or incapacitated.

And there are those who lost jobs and have found it difficult to find employment because of their age. Arguably, the latter category is the one that most needs addressing because there you have willing workers thwarted by a biased and intransigent attitude from employers.

It remains to be seen whether the Chancellor’s magnanimous gesture in abolishing the lifetime pension allowance to remove the tax hurdle for consultants staying in the NHS encourages any who have left to return.

For the sake of the economy, it might be an idea to focus on other early retirees and those who really can’t afford not to be working.

Catherine Mann, policymaker at the Bank of England in an interview on Blomberg TV warned that she is worried about whether the UK economy can grow without sparking inflation, a legacy of Britain’s decision to exit the European Union and thousands of people over age 50 dropping out of the labour market since the pandemic. 

Quoted also in The Times Mann said: “I worry that a couple of years down the line, we’re going to see people trying to come back into the labour force, and that’s going to be much more difficult.

“I worry about the supply side of the UK economy. It really is striking how slow growth is in the UK -much slower than what we observed for the US or for the euro area. Brexit is a factor on the supply side and on pricing power.”

The Government acknowledges, in its Spring Budget statement, that the falling participation in the workplace is a key economic challenge. It has mapped out how it hopes to tackle those who are ill, those perhaps disabled and who are concerned they may lose essential benefits and those who are ‘inactive’, whether they have chosen to be or not.

It remains the common case however that whatever the acknowledgement of the issue and whatever carrots and initiatives are thrown at the problem the employer elephant in the room is the one who doesn’t want to employ older workers.

The Chartered Management Institute (CMI) says that of more than 1,000 managers working in UK businesses and public services surveyed, just 42% would be open to hiring people aged between 50 and 64 to a large extent. For workers over 65, only 3 in 10 were open to hiring and 1 in 5 said their organisation was not open to the idea of hiring those over 65 at all.

So, time to tackle the disconnect between those in the ‘third age’ who want to work and employer perception. After all, fit and healthy people in their 60s may well live for another 30 plus years – that’s a lot of knowledgeable human capital to write off.

There is also age discrimination legislation – let’s employ that more as well.

Stephanie Spicer is head of content at Quill PR

Photo by Marten Bjork on Unsplash