Pensions in 2021

Last year was a uniquely challenging year globally and from both a health and an economic perspective. There is hope for 2021 to be a better year but it won’t be without its challenges. Let’s take a look at some of the key things to look out for in the pensions world.

State pension

It was announced in this year’s budget that the state pension will increase by 2.5% from 6 April 2021. Anyone entitled to the full level of new single-tier state pension will get £179.60 a week from 6 April 2021, up from £175.20.

To check your SPA or if you need any further information you should visit www.gov.uk/state-pension-age

Investments

The economic impact of COVID-19 has prompted stock market volatility which may have caused members pensions account values to vary and is set to continue throughout the year. Many members will be concerned about falls in the value of their investments. It’s important not to make any rash decisions as if you sell when the market is down, you will likely suffer a loss in the value of your investments and might miss out on any increases in value in the future if markets recover.

Keeping your pension safe

The pandemic has put many of us under financial pressure, and you may have been tempted to try and take your savings earlier than planned. It’s important to remember that no legitimate companies can help you access your pension before you are 55. If you come across one that does, it is likely to be a scammer out to steal your savings.

You can find out more about potential scams and how to spot them here.

If you are seriously considering changing your pension arrangements then consider getting financial guidance or advice before you do, either from The Pensions Advisory Service, Pension Wise or a financial adviser.

Responsible investing – environmental, social and governance (ESG)

On 26 August 2020, Department for Work and Pensions launched a consultation on proposals to require trustees to address climate change risks using governance and risk management measures. Climate change is a huge global issue which filters down to pension schemes and will continue to be at the forefront during 2021 and beyond.

The Trustees will continue to keep this under review and ensure that the Scheme complies with legislation. We will also provide updates in future editions of PensionBytes.