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The UK government is planning to expand the scope of collective defined contribution pension schemes in the hope it will improve retirement planning and channel savings into a wider pool of assets. 

In a consultation launched on Tuesday, the government is proposing to broaden access to CDC pensions to allow multiple employers to participate in a single scheme. The move comes after the Royal Mail launched the UK’s first such scheme this week. 

“This significant innovation will offer a more predictable income and greater finance security for future pensioners,” said pensions minister Emma Reynolds. 

CDC schemes offer a halfway house between traditional defined benefit pensions plans, which offer predictable payouts but are now generally closed to new members in the private sector, and defined contribution plans, where payouts are based on investment performance as well as how much the employee and company has paid in.

CDC members participate in a pooled scheme and are offered a target return they can plan their retirements around — but returns are not fixed and companies are not obliged to make up any shortfalls in the scheme’s funding. 

The government hopes that if companies club together to produce large CDC schemes, more investment will be channelled towards UK infrastructure and start ups, helping to support the government’s mission to boost the economy. 

The consultation comes as chancellor Rachel Reeves has made a review of the £2.4tn UK pensions industry a cornerstone of her plans to boost the economy and lift investment in British assets.

Reeves has said she wants to create a “Canadian-style” model with massive retirement funds investing in British equities and infrastructure.

A report published by New Financial last month found that UK pension schemes had only about 6 per cent allocated to private equity and infrastructure combined, compared with 34 per cent for Canadian public sector schemes and 14 per cent for Australian superannuation schemes.

However, the take up of CDC schemes — which have been allowed in the UK since 2021 — has been slow. The Royal Mail is the only company to announce plans to launch such a scheme.

Companies have been reluctant to set up CDC schemes because they have established defined contribution plans and are nervous of introducing new structures that could introduce new business risks.

“A ‘club’ approach is more viable than individual businesses . . . CDC does need scale for the concept to work,” said Raj Mody, partner at PwC, but he added that the challenge would be how companies mitigated the challenges involved with partnering with other companies. 

“Businesses are likely to want to see some protection from any club approach, especially given the long-term commitment required. Otherwise it may be too big a leap of faith,” he said. 

Edi Truell, a City financier, warned that there was also a “risk of intergenerational unfairness” with CDC schemes, with younger members bearing a disproportionate amount of the investment risk than older members, because they have longer to run until retirement and more time to weather any downside shocks.

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Kamala Harris has ruled out meeting one-on-one with Russian President Vladimir Putin to negotiate an end to the war in Ukraine unless leaders from Kyiv were involved.

In some of her most detailed comments to date about how she would try to end Russia’s war in Ukraine if elected US president, Harris said she would not meet “bilaterally” with Putin “without Ukraine”.

“Ukraine must have a say in the future of Ukraine,” Harris added, in a televised interview with CBS News’s 60 Minutes that aired on Monday night.

Harris also criticised Donald Trump’s claims that he would immediately halt the war.

“Donald Trump, if he were president, Putin would be sitting in Kyiv right now,” Harris added. “He talks about, ‘Oh, he can end it on day one.’ You know what that is? It’s about surrender.”

With less than a month to go until November’s US presidential election, Harris, Joe Biden’s vice-president, and her Republican opponent are sharpening their attacks on each other.

While Harris maintains a more than three-point lead in national polls, according to a Financial Times poll tracker, the two candidates remain locked in a virtual tie in the seven swing states that will determine the election outcome.

In the 60 Minutes interview the vice-president sidestepped a question about whether she would expand Nato — a central ambition of Ukraine.

“Those are all issues that we will deal with if and when it arrives at that point,” she said, adding that the administration’s focus was on “supporting Ukraine’s ability to defend itself against Russia’s unprovoked aggression”.

CBS said Trump had declined to participate in a similar interview with 60 Minutes on Monday night.

Trump has repeatedly said that he would end the fighting in Ukraine on “day one” if he were given another term in the White House, but has refused to detail how he would do so.

He met Ukrainian President Volodymyr Zelenskyy last month in New York, when the Republican presidential candidate touted his “very good relationship” with Putin as he said the war would be “resolved very quickly” if he were elected in November.

Harris met the Ukrainian president one day earlier at the White House. In remarks alongside Zelenskyy following their meeting, Harris suggested Trump would “force Ukraine to give up large parts” of its land and “require Ukraine to forgo security”.

Russia launched its full-scale invasion of Ukraine in February 2022. After more than two and a half years of the invasion, Kyiv is under growing pressure from western partners to find a path to a negotiated settlement with Moscow.

Trump raised alarm bells across Europe last month when, in his only televised debate against Harris, the former president refused to answer a moderator’s question about whether he wanted Ukraine to win the war. Instead he replied: “I want the war to stop. I want to save lives that are being uselessly [lost], people being killed by the millions.”

Earlier this year, Trump warned the US’s Nato allies that he would encourage Russia to do “whatever the hell they want” if alliance members failed to meet defence spending targets.

NEW rules requiring banks to reimburse people tricked into transferring money to a fraudster have come into force today.

Under the shake-up, banks must reimburse authorised push payment (APP) fraud victims unless the customer has been “grossly negligent”.

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Customers were initially set to receive reimbursements of up to £415,000.

However, the new rules have now implemented a cap of £85,000.

Banks can exceed this limit and repay higher amounts if they choose.

But, they also have the power to impose a £100 excess fee when settling claims, a policy that five banks have now adopted.

So, if your claim is for a payment of £100 or less, trying to recover the money may not be of any benefit.

Only four firms have pledged not to apply this charge: Nationwide, Virgin Money, TSB, and AIB.

Five banks – HSBC, First Direct, Lloyds, Halifax and Bank of Scotland – have said they will not cover fraud claims below £100.

The rest say that they “may” cover them or will judge each claim on a case-by-case basis.

Starling Bank says it may apply an excess of £50 rather than £100.

The only way to avoid this caveat is to switch to one of the four banks which have pledged not to apply these charges.

The £100 excess cannot be applied to vulnerable consumers under the Payment Systems Regulator’s (PSR) rules.

Liz Edwards, money expert at Finder, said: “Victim’s protection has been squeezed at both ends. When the upper refund limit was cut to just £85,000, many in the industry, including the PSR, justified this by saying it would still cover over 99% of claims.

“But because so many banks are now saying they won’t cover – or may not cover – the first £100, that 99% must surely be lower.

“Based on 2023 fraud figures, more than 58,000 cases would have resulted in no refund if all companies had applied the excess, and now only four of the major providers have confirmed they won’t.

“£100 is a lot of money to many people. It doesn’t help that 12 banks said they might apply it – customers don’t know where they stand.”

The new protections apply from October 7 and only when a transfer is made to and from a UK bank account.

Previously, many bank customers have relied on a voluntary code to get their money back.

Concerns were raised that consumers faced a refund “lottery”.

Fraud is broadly split into authorised and unauthorised.

Authorised fraud occurs when individuals are deceived into willingly handing over money or consenting to fraudulent payments.

Unauthorised fraud involves criminals stealing financial information to obtain products or services in the victims’ names.

A fraud explosion in recent years has seen criminals pose as trusted institutions such as banks, companies, or government departments to persuade people to part with their cash, and scams are becoming increasingly sophisticated.

According to figures from UK Finance, the total number of APP cases jumped by 12% annually last year to 232,429. Reported losses to this type of scam totalled £459.7 million.

Purchase scams accounted for around two-thirds (67%) of the total number of APP cases in 2023.

With a purchase scam, someone pays in advance for goods or services that are never received, often ordered online, such as through an auction website or social media.

PROTECT YOURSELF FROM SCAMMERS

More than three-quarters of authorised fraud starts online.

When handing over cash for goods or services found online that you haven’t yet received, you should be extra vigilant against scams. 

Fraudsters often use popular events, such as the recently announced Oasis concerts, to prey on victims.   

Buy from reputable sources and sites to protect yourself.

Alarm bells should be ringing if prices are too good to be true.

Take the time to carry out extra checks on unknown sources. 

Fraud cases originating through phone calls make up fewer cases, but losses are often far larger.

These are typically when criminals impersonate banks or other trusted sources.  

It’s ok to reject, refuse or ignore requests for cash.

Usually, criminals will try to pressure or rush you into payments.

If you doubt a caller’s identity, call a trusted company or organisation phone number to check. 

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UK retail spending increased at the fastest pace in six months in September, helped by higher clothing purchases, raising hopes for a busy festive season.

The value of retail sales increased at an annual rate of 2 per cent last month, up from 1 per cent in August and the fastest pace in six months, said the British Retail Consortium, a trade body.

The figures will be closely watched to see whether the drop in consumer confidence registered in September had translated into a slide in spending as retailers enter their busiest trading period ahead of Christmas.

Helen Dickinson, chief executive of the British Retail Consortium, said the strong reading came as non-food items performed “better than expected”.

“As autumn rolled out across the UK, shoppers sought to update their wardrobes with coats, boots and knitwear,” she said. However, “ongoing concerns of consumers about the financial outlook kept demand low for big-ticket items such as furniture and white goods”, added Dickinson.

BRC data are not adjusted for inflation, but the latest figures suggest sales volumes might have increased last month.

This is because some economists, including at Pantheon Macroeconomics, expect UK inflation to drop to 1.9 per cent in September after hitting 2.2 per cent in July and August. Official inflation figures for September will be published on October 16. BRC retail spending growth has been weaker than price growth almost uninterruptedly since late 2021.

“Household budgets are feeling slightly less constrained for some parents compared to last year,” boosting spending on children’s clothing, footwear and accessories, said Linda Ellett, head of consumer, retail and leisure at KPMG, which helped to compile the data.

The BRC figures chime with separate data from Barclays, which showed consumer spending rising by an annual rate of 1.2 per cent in September, following a 1 per cent increase in August and a contraction in the previous two months.

Barclays data, which tracks 40 per cent of the UK’s credit card transactions and was published on Tuesday, reported that spending on clothing rose by an annual rate of 4.5 per cent, marking the first uplift this year and its highest growth since July 2022.

Karen Johnson, head of retail at Barclays, said: “Retail’s recovery emerged as a bright spot in September.

“While shoppers remain cost conscious, it’s clear they’re responsive to retailers’ promotional activity,” she added.

Non-essential spending, such as entertainment and hospitality, rose by an annual rate of 2.7 per cent in September, the fastest rate this year, according to Barclays.

Boosted by demand for tickets for Oasis’s reunion tour, spending on entertainment rose by 14.4 per cent, the fastest in more than a year.

“There are encouraging signs that people feel confident in their ability to manage their household finances and take control of their festive spending,” said Johnson.

A THIRD of working parents have had to reduce their working hours – due to difficulties accessing childcare.

A poll of 3,000 employed mums and dads of children up to 11 revealed the struggles they face, with 31 per cent requesting flexible working arrangements to balance their responsibilities.

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Nearly a quarter (24 per cent) rely on partners or other family members who have had to reduce their paid work or even quit their job.

And 16 per cent claim the impact of accessing childcare has led to them avoiding applying for new roles.

But despite the support provided, 46 per cent say they find it hard to maintain boundaries between their job and homelife.

Jane van Zyl, CEO of the charity Working Families, which commissioned the study ahead of National Work Life Week (7th-11th October), said: “Accessing affordable and reliable childcare has become a significant challenge for many families.

“A lot of parents are struggling to balance work and family life due to limited availability, rising costs, and long waiting lists.

“It’s not just an inconvenience – it’s a barrier that impacts career opportunities, financial stability, and overall well-being.”

The study also found 75 per cent regularly work overtime, as 23 per cent claim it’s the only way to manage their workload.

Nearly three in 10 (28 per cent) are implementing variable hours, 19 per cent are remote, and 15 per cent work term-time hours only to help with childcare issues.

However, a fifth of parents don’t have any flexible arrangements in place – with this being most prominent in the transport and logistics sector (42 per cent).

Parents who work in retail (32 per cent), leisure, sport and tourism (30 per cent), and hospitality and events management (29 per cent) are also impacted.

Despite 62 per cent claiming their employer cares about their work life balance, 51 per cent have previously refrained from applying for a job because it didn’t offer flexibility.

This is important as it allows them to manage childcare responsibilities (63 per cent), spend quality time with family (46 per cent), and helps to reduce the overall cost (45 per cent).

It also emerged parents believe flexible working has led to development of new skills (61 per cent), and an increased in loyalty to their current employer (73 per cent).

While 77 per cent of those polled via OnePoll.com went as far to say it has allowed them to stay in their current role.

However, six in 10 currently work shifts, with 27 per cent receiving up to only one weeks’ notice of their schedule – making it difficult to organise childcare arrangements.

Jane van Zyl added: “Flexible working is not only a benefit—it’s a necessity for today’s parents who are juggling work and family life.

“By offering more adaptable work arrangements, we empower parents to be present for their children while continuing to thrive professionally.

“We’ll be paying close attention to the upcoming changes to the Employment Bill expected this week to see how the Government are planning to overcome the challenges working parents are facing through more robust flexible working policies.”

Flexible working campaigner and ambassador for Working Families, Anna Whitehouse – also known as Mother Pukka – said: “This is the reality for so many parents – we’re stuck in a cycle where childcare is either unaffordable or unavailable, forcing families to make impossible choices.

“Parents are cutting back their hours or missing out on job opportunities just to get by day-to-day. The system, as it stands, doesn’t work.

“If we truly want to support families, we need workplaces that make it possible for parents to manage the balancing act of work and childcare, without having to sacrifice their own wellbeing.”

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