Good morning and welcome to your Morning Briefing for Monday 17 July, 2023. To get this in your inbox every morning click here.
Advice evolution
One of my favourite quotations about history comes from the late Polish philosopher Leszek Kolakowski.
“We learn history not in order to know how to behave or how to succeed, but to know who we are,” he once said in a lecture.
This line came to me when reading when Chris Budd’s column on the how the sector has evolved from advising about products, to investments alongside tax and then on to someone’s wellbeing.
Dashboard delay
Wealth Wizards has called on providers to “fully capitalise” on the extra time from the deadline extension to connect to the pensions dashboard.
It argues the pensions industry should use the time wisely.
The mandatory date for pensions providers to connect to the pension dashboard has been pushed back to 31 October 2026.
Quote Of The Day
The cost-of-living crisis continues to squeeze the life out of our finances with renters particularly vulnerable to rising costs. According to the data renters are around five times more likely than outright homeowners to experience a financial vulnerability though those still paying a mortgage are also at increased risk.
– Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, on how the cost of living is squeezing renters
Stat Attack
Aon has published the second issue of its DC Today pulse survey which is designed to track how DC schemes and their members are reacting to the current economic conditions. The survey focuses on whether DC schemes are making changes to their investment approach. It found that:
20%
Of DC schemes continue to report increases in members opting out or reducing contributions
38%
Of DC schemes report an increase in member queries or concerns about their investments
Over half
Of DC schemes have made or are considering changes to their investment strategy in response to current economic challenges. Perhaps surprisingly, they are generally not making changes not to fixed income assets, and take up of private markets remains low
4%
Of DC schemes have increased allocation to private markets or illiquid asset investments, whereas more than three times as many (15%) have increased allocation to ESG investments with a further 20% currently considering this
Source: Aon DC Today
In Other News
Savers are leaving a third of adult ISA and non-ISA instant access balances in accounts earning 1% or less in interest despite the increasing rate environment, Paragon Bank analysis has revealed.
The analysis of the latest CACI data, which compiles the savings deposits of 34 leading providers of adult cash savings, shows that £250bn is held in instant access accounts earning 1% or less, representing 33% of instant access balances.
By volume, 38.6 million, or 59%, instant access accounts are earning 1% or less, highlighting the poor returns many instant access savers are generating by not seeking out better rates.
CACI’s April data shows instant access balances have been in decline in recent months as savers switched to fixed-rate alternatives. Instance access balances across ISA and non-ISA variants ended the month at £765bn, down from £801bn at the end of 2022. Conversely, fixed-term balances ended April at £239bn, up from £181bn at the end of last year.
Parliament should consult with organisations including the Association of Taxation Technicians on the government’s progress towards simplifying the tax system, says the association’s new president.
In his inaugural speech at the association’s annual general meeting on Thursday (13 July), Simon Groom said that he had written to MP Harriett Baldwin, chair of the House of Commons Treasury Select Committee.
It encourages her and her colleagues to canvass the views of the ATT and other professional bodies annually on how progress towards simplification is developing.
From Elsewhere
CPTPP trade deal will benefit UK if we use it, says Kemi Badenoch (BBC News)
Interest rate rises drive biggest postwar fall in UK household wealth (Financial Times)
UK housing slowdown hits market confidence as asking prices fall (The Guardian)
Did You See?
In her latest Weekend Essay, features writer, Amanda Newman Smith explains why office design appealing to the five senses makes sense. Listen now:
