They’ve requested a search, found their pots and seen the combined value of their pensions on a single screen for the first time.

Testing is set to accelerate over the coming months with thousands of members given the opportunity to see all their pensions in one place. This will test the infrastructure more fully and provide important feedback from people of all walks of life on what they understand about what they are being shown, and if it meets their needs and expectations.

The biggest question most people will have is when will the dashboards be available to everyone? It’s unlikely we’ll see any announcement while testing is ongoing as it will be better to announce a definite date than one that is contingent on testing and subsequent development being successful. When the bell sounds, we want to be sure that we are on the final lap. Realistically, we can expect that signal to come later this year, with the go live date being in 2027.

There are still some development hurdles to negotiate. The Pensions Dashboards Programme is currently consulting on changes to the reporting standards. These set out the data that pension schemes must provide to the dashboards on their performance and compliance. These include meeting the requirement to respond to 99.9% of data view requests within ten seconds. Any changes will require provider systems to be reconfigured, and tested, to ensure compliance.

While reaching the go live date might represent the finishing line for the Dashboards Programme, it will be a baton transfer for pension schemes. Aviva is already preparing for the launch, ensuring the right people and processes are in place to support the anticipated increase in consumer engagement once the Dashboard goes live.

The regulators are also getting on their marks. The FCA have recently consulted on how revised rules can prompt improved decision making when scheme members are considering transferring their pension. The obvious risk is that individuals who are keen to have their pension in one place will move their pension money without fully appreciating the potential downsides. The FCA are keen to promote side by side comparison of key drivers of good outcomes, such as fund performance and charges, at retirement options, guarantees and protections, as well as drivers of engagement like apps and website capability. Many providers offer this already, but it isn’t universal.

The Pensions Dashboards Programme is a fantastic achievement but its success in driving better outcomes will depend as much on the success of the handover to pension schemes, as the years of development to date. Schemes may want to consider providing information and education ahead of pensions dashboards becoming available, but also once it is in place. It’s a huge opportunity for people to make positive, well informed, changes to their pension plans, that go beyond consolidation.

The Broadstone Sirius Index has rebased for 2026, tracking a ‘growth focused’ and a more conservative ‘matching focused’ investment strategy against a low dependency basis*. Both schemes started 90.0% funded at the start of 2026.

Reporting its update for March 2026, the Broadstone Sirius Index found that both schemes unsurprisingly reversed gains that had been made through February and January of 2026 during the month in the face of considerable economic and market volatility.

The funding level of the ‘matching focused’ scheme decreased by 1.7 percentage points from 90.3% at the end of February to 88.6% at the end of March.

The funding level of the ‘growth focused’ scheme fell back slightly more, by 1.8 percentage points, but from a higher starting point given the positive growth returns over January and February. The funding level fell from 90.8% at the end of February to 89.0% at the end of March ending the quarter slightly ahead of the ‘matching focused’ scheme.

Chris Rice, Head of Trustee Services at Broadstone, commented: "The last few years have been incredibly strong for the health of defined benefit schemes, allowing many investment strategies to be derisked to protect scheme funding positions.

“Most schemes shouldn’t be experiencing a significant change in funding in the first quarter of 2026, with the deterioration in March generally reversing January and February’s gains.

“The instability will no doubt cause concerns for trustees and sponsors however and trustees should be regularly monitoring their liquidity, hedging levels and LDI resilience.”

Not being able to export oil, affected countries first filled up domestic storage, and once this was full they had no choice but to shut in production. At the time of writing, we have seen 10mb/d of oil market production closed. The figure is smaller than the pre-conflict Strait volumes as some pipelines have been used to bypass the Strait, in particular by Saudi Arabia.

The disruption has seen oil prices rise to around $120 per barrel (bbl), with Middle Eastern barrels and refined products trading at levels never seen before. Singapore jet fuel reached $220/bbl at one stage compared to $82/bbl pre-conflict.

As of 8 April, Iran and the US seemed to have stepped back from the brink and agreed to a two-week ceasefire and the re-opening of the Strait of Hormuz. Both sides are claiming victory.

If the vessel number surges to 75% of pre-war levels, then that represents a near normalisation of flows given the current use of pipelines that were not previously running at full capacity.

However, while shipping levels could return to normal quickly, it will take weeks or even months for production levels to return to normal given the 10mb/d of shut-in production and damage to some facilities. This should mean that front month oil prices (i.e. oil for near-term delivery) are unlikely to fall to pre-conflict levels quickly. The uncertainty about when production will return should support prices. And the outcome of any talks is unknown; we have had two rounds of unsuccessful talks before so there is no guarantee they will work now.

We do not know if the US will refill the SPR at this pace, but this conflict has highlighted the vulnerability for many. It would not be surprising if Asian and European countries, which have been more impacted and have limited reserves, try to address this in the coming years. These long-term factors should support oil prices in the medium term.

We will continue to adjust positions as the Middle East conflict evolves. Whatever the outcome, we strongly believe that these events have raised the long-term floor for the oil price in all scenarios, apart from one where Iran is now a Western leaning country, an outcome we think unlikely.

Oil prices have eased back from the highs seen earlier in the week but remain stuck in an elevated $95-100 range as supply concerns continue to dominate the outlook. The ongoing closure of the Strait of Hormuz remains the key sticking point, with President Trump warning Iran against imposing transit fees on vessels moving through the crucial shipping lane - a concern that has also been echoed by the UAE. Shipowners are still waiting for clearer guidance on access, leaving one of the world’s most important energy arteries largely closed to traffic. Until it reopens, oil prices are unlikely to return to more stable levels, keeping inflation worries alive for investors. Getting the waterway flowing again will be a clear priority for the White House, which, despite some strongly worded social media posts, doesn’t seem to have the leverage needed to force a full reopening.

TSMC, the world’s largest contract chipmaker, reported first-quarter revenue up 35% year on year, beating market forecasts on continued strength in demand for AI hardware. March was particularly strong following a slightly softer February, with growth of 45%, almost double the longer-term average for the final month of the quarter. There may be plenty of noise elsewhere in the world, but the AI buildout shows little sign of slowing, with demand for AI hardware as strong as ever. Investors need only look at soaring GPU rental prices, tightening availability, comments from cloud CEOs, and now a strong set of sales from TSMC for confirmation. As software stocks continue to come under pressure, hardware names are beginning to absorb a greater share of investor capital. While certain software names look attractive at current valuations, we believe AI hardware is set to capture a larger-than-usual share of economic value in an increasingly AI-infused world, suggesting the chip trade may have further to run.

Gold is set for a third consecutive weekly gain, although it has not acted as the store of wealth or shock absorber that many might have expected during the recent Middle East tensions. That is largely because interest rate expectations have been the bigger driver of price action, outweighing the typical risk-off demand. This week’s tentative ceasefire, coupled with news of talks over the weekend, has shifted rate expectations into a more favourable position for gold, helping support the latest move higher.”

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US stock futures slipped lower this morning, giving up some of yesterday’s gains as renewed Israeli strikes on Lebanon raised questions about the durability of a fragile ceasefire agreement in the Middle East. While it’s been a tough start to the year for equity investors, the bigger picture needs to be kept in mind. The S&P 500 has already rallied more than 7% from its 30 March low and is now down less than 1% year-to-date. While progress towards a more permanent resolution in the Middle East will dominate short-term market moves, it’s earning power that drives stock prices in the long term. Some corners of the market have seen their share prices get caught up in the broader market sell-off, despite a resilient or improving earnings picture, so there’s something to be said for being greedy when others are fearful.

Brent Crude prices recovered some of yesterday’s sharp losses this morning, moving nearly 2% to around $97 per barrel following further Israeli strikes on Lebanon. The Strait of Hormuz, which handles around 20% of global crude and gas flows, remains largely obstructed, and Iranian media reports suggest that oil tanker traffic through the Strait has been suspended again following the attacks by Israel. Oil prices will likely remain elevated and choppy until a more permanent agreement is struck between all parties, and on that front, US Vice President JD Vance is set to lead a US delegation to Islamabad for direct talks with Iran this weekend.”

Matt Britzman, senior equity analyst, Hargreaves Lansdown:

“Meta’s new AI model, Muse Spark, is a better-than-expected first release from Zuckerberg’s Superintelligence Labs, a team he's spent tens of billions building after last year’s misstep that led to a reset of its previous model group. Shares jumped last night as early benchmarks show the model performing in the same broad range as leading systems despite this being the team’s first real outing since that overhaul. Meta was upfront that this is very much iteration one, and while there still appears to be a gap between Muse and the top models from OpenAI and Anthropic, this moves Meta back into the upper tier of model builders. With markets having largely priced in little return from its AI investment plans, this release offers an early signal that the new team is back on track and begins to put some tangible footing under longer-term monetisation hopes - we think the risk/reward setup for Meta is attractive right now.”

Broadstone’s DB Redress Tracker follows the example of an individual who left their scheme in 2018 aged 50, with a pension of £10,000 p.a. which would receive inflation-linked increases when in payment. The potential spread around the example case – the area shaded blue in the below chart – has been updated to reflect the largest loss and gain in a notional portfolio of cases (previously it showed a narrower spread based on varying the fund return for the single example case).

The Tracker is developed in line with Financial Conduct Authority (FCA) rules for calculating redress with the individual assumed to have invested their funds to earn returns in line with the FTSE Private Investor Index.

The most recent update for Q2 2026 shows that no redress is payable as the consumer is likely to be judged to be better off as a result of the transfer with the central estimate remaining broadly unchanged at compensation of -£40,000.

The last time that the Tracker found compensation would be payable was Q4 2024 (£2,000) with the central estimate showing a clear and sustained downward trend; three years ago, the central estimate found that £57,000 (Q2 2023) would be payable.

However, that central result hides that that there are still some consumers to whom redress will be payable as the redress evaluation will need to consider factors including:

the critical yield at time of transfer – the higher the critical yield the more likely redress is payablethe date of transfer – transfers during the period 2016-2018 will generally show a gain, whereas more recent transfers and, particularly, much older transfers are more likely to show a lossinvestment returns since transfer – consumers who have achieved relatively low investment returns post transfer, whether due to choosing low risk investments such as cash or making poor investment choices will be more likely to show redress payable

While attention is likely to focus on the impact of current global instability on redress figures, to-date there has been minimal impact scrutinising the data through March 2026.

Assets have deteriorated following the conflict in Iran and inflation expectations have spiked, but this has largely been offset by increases in bond yields.

Simon Robinson, Senior Consultant & Actuary in Broadstone’s Insurance Advisory & Remediation division, commented: “While markets have experienced a period of heightened volatility over the past month or so, the impact on DB transfer redress calculations has so far been limited. Poorer asset performance would normally increase the likelihood of redress being payable, but this has largely been offset by rising short- to medium-term bond yields, which reduce the value of the benefits that would have been given up.

“Our central estimate continues to suggest that, in many cases, redress will not be payable for most consumers. However, the headline figure does not tell the whole story and outcomes remain highly dependent on individual circumstances such as investment performance, the critical yield at the point of transfer and the timing of the transfer itself. This means that while the overall trend in redress calculations has moved down significantly over the past few years, there will still be a cohort of consumers for whom redress is payable, and firms must continue to assess cases carefully rather than assuming no compensation will be due.”

Shreyas Sridhar, Managing Director, BPA, at Canada Life said: “I am delighted to welcome Rhian to the Canada Life team, and I look forward to the impact she will make as we continue to build momentum in our BPA business. Rhian brings a unique blend of commercial acumen, leadership capabilities, technical depth, and market insight, and will play a key role in helping us deliver on our ambitious strategy.”

Commenting, Rhian Littlewood said: “I am pleased to be joining the Canada Life team at an exciting time in the risk transfer market and at a pivotal point in Canada Life’s strategic plans. I am looking forward to working alongside a very talented team, to deliver on the business’s growth trajectory.”

This assessment should of course be proportionate and guided by how much future support the scheme is likely to need from its employer. Many schemes are now very well funded and a light touch review is appropriate. But for those with funding deficits where making an assessment of covenant reliability is more important, doing so during a period of such economic uncertainty can be challenging.

The covenant reliability period influences deficit repair contributions, recovery plan length, and how much investment and funding risk the scheme should run. It’s also something that should be considered where schemes are thinking about running on and sharing surplus with the employer.

Covenant reliability is not about how long the employer is expected to be around (that’s ‘covenant longevity’ – more jargon!). Covenant reliability is about looking at the employer’s cash generation and its uses, reviewing its future cash flow forecasts and business plans, and establishing how reliably it is generating cash and at what level (i.e. a £ amount) it would be available to fund the scheme. That’s another key concept trustees need to conclude on – maximum affordable contributions, or “MAC”, as a total £ amount over the covenant reliability period.

The Pensions Regulator has said it expects most covenant reliability periods to be three to six years. But some may be much shorter.

If you haven’t yet navigated a valuation in the new regime this might be a bit confusing, and these new concepts are certainly more complex than having to decide on one of four covenant grades! Have a look at our guidance on preparing for the new covenant requirements for some more information on these key new concepts: New DB funding code - Preparing for the new covenant requirements.

For many businesses the issues aren’t just from events this year, they’ve experienced headwinds since the Ukraine conflict impacted supply chains and energy costs, and then the imposition of US tariffs and retaliatory actions on global trade. And some businesses that were particularly hit during Covid are yet to recover fully. There’s also the impact of actions taken by the UK Government, such as increased National Insurance and minimum wage rates, and material increases to business rates hitting this year.

The impacts of this latest phase of geopolitical instability are difficult to predict. It could be that there is such uncertainty about how, when, or by how much, the employer may be impacted, that it makes assessing the outlook, and covenant reliability, a real challenge.

When economic conditions become so unpredictable, an employer’s ability to support its scheme can deteriorate quickly and sometimes without much warning.

This makes it more important than ever that the covenant is regularly monitored and advice sought to support trustee considerations.

A lot of schemes don’t have a funding deficit now, but trustees still need to take a proportionate look at the strength of covenant, including its reliability. It’s about checking that the covenant can underwrite scheme risks, making sure that if downside events materialise that the employer can afford to make them good over a reasonable period of time.

This is more important now than ever, because current geopolitical events make it more likely that downside scheme events will occur. They cause financial market volatility which can lead to a fall in the value of a scheme’s investments, potentially creating or increasing a deficit. This happening at the same time as the employer is also exposed means trustees risk having a bigger scheme funding need supported by a weaker covenant.

This could mean it’s appropriate to conclude on a shorter time period for covenant reliability, or a lower level of cash availability (or MAC) for the scheme.

In some cases, it may mean considering mitigating actions, such as seeking contingent asset support, accelerating funding for the scheme, derisking the scheme’s investments, or revisiting whether run-on remains the best option.

The Pensions Regulator’s 2025 annual funding statement emphasises that trustees should consider trade and geopolitical uncertainty, as well as other longer term economic dynamics like the energy transition, when assessing covenant. Where these factors could materially impact the employer, trustees should ensure scheme risk remains appropriate. We expect to see more guidance on these issues in the 2026 annual funding statement due to be published in a few weeks.

Covenant reliability is not just a consideration at triennial valuations. It’s integral to managing a DB pension scheme. Recent events have shown that external shocks can arrive suddenly and have significant, lasting effects on employer finances. Regular covenant monitoring and communication with the employer is key. Trustees and employers need the right advice to ensure plans are in place for difficult periods.

Murthy Grandhi, Company Profiles Analyst at GlobalData, comments: “The aggregate market capitalization across the top 25 has contracted meaningfully year-on-year (YoY), yet the losses are grotesquely concentrated. Five US insurers — UnitedHealth Group, Elevance Health, The Progressive Corp, The Cigna Group, and Aflac — collectively shed roughly $226 billion in market value between March 2025 and March 2026. The rest of the table, predominantly European and Asian P&C and life insurers, either held steady or gained. This is not a sector-wide malaise. It is a specifically American managed-care catastrophe.”

The UnitedHealth unravelling

UnitedHealth Group is absorbing a roughly 20% stock rout after warning investors it expects its first annual revenue decline in more than three decades, a striking reversal for a company long viewed as a reliable compounder. Full-year 2025 revenue rose about 12% to $447.6 billion, but 2026 guidance points to sales falling to “greater than $439 billion,” implying contraction rather than growth. Its market cap plunged 48% from $472 billion to $245.6 billion, the largest absolute dollar destruction in the top 25 cohort.

The damage extends beyond guidance. DOJ criminal and civil investigations into UNH’s Medicare Advantage billing practices remain open, focusing on whether patient diagnoses were inflated to secure higher reimbursements. At the same time, the Trump administration proposed a near-flat 0.09% net rate increase for 2027 Medicare Advantage plans, down sharply from the 5.06% increase for 2026 and below the 4%–6% many analysts expected. The combination of regulatory repricing and a federal probe has reset the stock’s valuation multiple.

Elevance Health (-34.5%) and Cigna (-20.2%) echo the trend in different ways. Elevance’s medical benefit ratio reached 92.4% in Q4 2024, while managed care loss ratios averaged 90.7%, up 4.5 percentage points year-on-year. These are not cyclical blips; they point to structural mispricing of medical trend after years of aggressive Medicare Advantage expansion supported by premium rates that now appear insufficient.

Progressive’s -29.1% decline is often misread when framed against its peak. The Ohio-based P&C insurer, which jumped to rank three globally by Q1 2025, is normalizing from extraordinary pandemic-era auto insurance pricing power as competition returns and loss ratios revert.

Grandhi adds: “Asian and European insurers now occupy seven of the top 10 spots globally, a configuration that would have seemed implausible just a few years ago.”

AIA Group’s 38.8% surge to $113.8 billion, the strongest performance in the top 25, reflects its fundamentals. AIA posted record Value of New Business of $1.48 billion, up 25% YoY, with mainland China up 27%. Ping An (+18.2%) and China Pacific Insurance (+22.7%) benefited from Beijing’s late-2025 stimulus pivot, which boosted domestic equities and improved life insurers’ investment returns, given their sensitivity to asset yields.

Great-West Lifeco (+17.7%) and Manulife (+8.9%) reflect Canada’s relative insulation, while Allianz (+7.0%) and Chubb (+7.1%) underscore the resilience of diversified global P&C franchises with disciplined underwriting.

Life Insurance Corporation of India (-17.3%) is the outlier among Asian names, weighed down by India’s equity market correction and LIC’s heavy domestic equity exposure — a vulnerability tied to its state-owned model.

Tokio Marine’s rise to rank 11 also merits attention. Japanese insurers are benefiting from the Bank of Japan’s gradual rate normalization, which lifts investment income on massive bond portfolios after decades of near-zero yields; this tailwind is multi-year, not temporary.

Berkshire Hathaway remains the sector’s anchor at $1.03 trillion market cap despite a -9% YoY decline. Its diversified, float-driven model—using insurance as a capital engine rather than just a premium business—buffers it from Medicare-specific pressures.

Grandhi concludes: “GlobalData anticipates that three forces—tariff wars, Middle East tensions, and geopolitical fragmentation—are hitting global insurance balance sheets at once. P&C carriers face rising marine cargo losses tied to persistent Hormuz and Red Sea disruption, while demand for trade credit and political risk products accelerates.

“China-exposed life insurers such as AIA and Ping An also carry latent RMB depreciation risk if US-China decoupling deepens. Carriers are adapting with tariff-linked products and quarterly property revaluations, while Asia-Pacific benefits from softer reinsurance pricing and strong solvency buffers. The dividing line in 2026 is clear: disciplined underwriting wins, growth-at-any-cost loses. This is not a market cycle, but a structural repricing of global insurance capital.”

Oil prices have moved sharply lower as the ceasefire agreement marks the first meaningful step toward a potential resolution. News that all parties are now working toward reopening the Strait of Hormuz is another clear positive for market sentiment, even if energy markets remain cautious. There is still work to be done, though, and oil prices will likely remain elevated and choppy until there is a more permanent resolution. The return of free-flowing traffic through the Strait of Hormuz, without any Iranian tolls or controls, feels essential if oil prices are going to start trending back toward levels we saw before the conflict began.

Interest rate expectations have shifted slightly following the ceasefire, bringing markets back toward the view that further US tightening is off the table. Investors are now becoming more comfortable, tentatively pricing in the potential for rate cuts to resume toward the end of this year or into early 2027. In the UK, markets are still attaching some probability to another hike, although conviction has faded meaningfully in recent sessions. We still see rate hikes as unlikely, given lingering growth concerns, with a holding pattern more probable for now. Further moves in this direction, and perhaps an eventual return to expectations of rate cuts, would be supportive of both stock markets and gold.

The Halifax House Price Index showed UK house prices rose 0.8% year on year in March 2026, the slowest pace in three months, while prices fell 0.5% over the month to leave the average UK home valued at £299,677. That backdrop has added to recent pressure on housing-related stocks, which have struggled as rate-cut expectations have fallen away. However, easing tensions and a more stable outlook for borrowing costs could now provide a welcome tailwind for the sector at a time when momentum has started to fade.”

Note, the sample savers used in the Aon DC Tracker were ‘re-set’ to their original age and fund values at the year-end which results in the discontinuity (shown in grey in the chart above) as at 31 December 2024.

The Tracker rose from 71.3 to 73.4 over the last quarter of 2025, driven predominantly by positive benchmark investment returns across major asset classes.

This has resulted in an increase in expected retirement income for all savers, though younger savers benefited the most (in percentage terms) as they also benefit from higher future return assumptions post-retirement, unlike older members who are closer to retirement.

Pensions rise in a volatile year
2025 was another volatile year with global headlines dominated by tariff announcements and persistent geopolitical tensions that unsettled markets and created a challenging environment for investors. Despite this turbulence, DC pension savers typically fared well and were expected to have a higher income in retirement than they were at the start of 2025.

Expected retirement outcomes were also supported by a relatively small increase in the Retirement Living Standards during the year which was more than offset, at the minimum and moderate target levels, by the April increase in the State Pension.
While 2025 finished on a high for pension savers, the start of 2026 has brought further market volatility from geopolitical events. Continued uncertainty around ongoing energy supplies means the spectre of inflation is looming large over the global economy once again. This prospect of higher inflation has the potential to erode the real value of retirement incomes for pension savers and put pressure on household budgets. This may lead to a reduction in the amount people can afford to save for the future. It will be interesting to see how our sample savers fare during 2026.

If earlier Tracker updates are anything to go by, and as seen in 2022 and 2023, climbing the ladder of positive returns can quickly be undone when an increase to the Retirement Living Standards effectively raises the bar for savers. Members may feel themselves sliding back down towards a lower standard of living as a result.

Matthew Arends, partner and head of UK Retirement Policy at Aon, said: “While everyone’s expectations of an ‘adequate’ retirement income will differ, any change to the Retirement Living Standards, particularly an increase, will require DC savers to reassess their positions and consider whether additional savings, or working longer, may be required to achieve the living standard they want in retirement.

“The recent jump in oil and gas prices is driving another surge in inflation which will add more pressure to household budgets. Understandably, people may find it difficult to maintain or even increase pensions savings against this backdrop. When coupled with the expected increase in the Retirement Living Standards, many savers may see a comfortable retirement slipping further out of view.”

The youngest saver saw an increase of around £1,000 p.a. (2.7 percent) driven by positive actual investment performance over the quarter and an increase in expected future investment return assumptions both pre- and post-retirement.

The 40-year-old saver saw the largest increase of around £1,050 p.a. (or 2.6 percent) in their expected retirement income. Again, this was driven by positive actual investment performance over the quarter and a rise in post-retirement expected future returns. These were offset to a degree by a reduction in the expected future return pre-retirement.

Our 50-year-old saver saw an increase of around £500 p.a. (or 1.3 percent) in their expected retirement income. Due to this saver’s larger existing funds, strong investment performance gave the most benefit, particularly in equity markets, over the quarter. However, this was partially offset by decreases in expected future return assumptions pre- and post-retirement.

The oldest saver’s income was broadly flat (an increase of around £50 p.a. or 2.6 percent). This was as a result of positive investment return over the quarter being almost entirely offset by a reduction in expected future returns pre- and post-retirement.

Overall, the oldest saver is expected to be the worst-off in retirement, albeit with a retirement income of around 150 percent of the ‘minimum’ Retirement Living Standard. This excludes any defined benefit pension benefits they may have but which are not included in this projection.

If you are married or in a civil partnership, then you have further advantages. To start with, you can pass on assets of any value to your spouse/civil partner free of inheritance tax. They can also inherit any unused nil rate bands that you have. This means that a surviving spouse/civil partner can potentially pass on up to £1m on death before the estate faces an inheritance tax bill.

There are various allowances you can make use of to reduce the value of your estate. You can gift any amount of money to a loved one and it will fall out of your estate for inheritance tax purposes after seven years. These are known as Potentially Exempt Transfers (PET). If you die within that time, inheritance tax may need to be paid, though potentially at a reduced rate.

There are also allowances that will take money out of your estate for inheritance tax purposes immediately. For instance, you can make use of your £3,000 annual allowance to gift to loved ones. You can also gift up to £250 to any number of recipients but you can’t gift this to someone who you have also made a gift to using another allowance – doing so would mean part of the gift would be classed as a PET, and you’d have to live for seven years after giving it for it to become IHT-free.

There are also allowances that can be used when a loved one gets married. You can give up to £5,000 to a child, £2,500 to grandchildren and great grandchildren and £1,000 to anyone else. These gifts need to be made on or before the wedding, and the wedding does need to go ahead!

Gifts to charities and political parties can also be made inheritance tax free. On death, if you gift at least 10% of your net estate to a UK registered charity, you will also see the rate of IHT you pay on your remaining estate will drop.

Another important rule is what is known as ‘gifting out of surplus income’. You can give away any amount, and it comes out of your estate for IHT purposes immediately. However, there are rules. The gift needs to come from income, not capital. It needs to be made on a regular basis, and it must not affect your standard of living. Examples of this could include paying school fees for a grandchild or contributing to a Junior ISA.

You also need to make sure that when you gift something away then that is what you are doing. So, for instance, if you were to gift your home away to a loved one but continue to live in it rent- free then it could be seen as a gift with reservation – i.e. you are still benefiting from it. If this is the case, then your estate could be landed with a bill.

Trusts can also be used as part of an inheritance tax strategy, but this can be complex and your estate could still end up with an inheritance bill. It’s important to take financial advice so you understand your options before going down this route.

At the time, it felt like an inevitable evolution and a natural response to economic pressure, a move away from employees working for a single employer for most of their working life and company directors desiring certainty over pension costs. Yet, looking back three decades later, in my role of Chief Actuary of the Pension Protection Fund (PPF), I find myself watching a remarkably familiar story unfold.

The PPF exists to provide a vital safety net within the DB universe. That role, balancing long-term financial resilience with member protection, gives us a unique opportunity to observe how the industry is evolving.

The rapid run-off of DB schemes and wholesale transfer of liabilities to insurers achieved certainty - but at a cost. Investment and longevity risk moved almost entirely onto individuals, often with limited support or financial resilience. Over time, that contributed to uneven retirement outcomes and, in many cases, inadequate incomes later in life.

This matters today because the UK is at a similar crossroads. If the system as a whole loses too much risk-sharing capacity too quickly, we risk narrowing the range of options available to future generations.

That is where the PPF, with our unique perspective, can help support and inform future thinking.

The latest Purple Book data provides grounds for cautious optimism. Funding levels across the DB universe have improved considerably which, when coupled with the PPF’s financial position, has helped us move to a new phase in our funding journey. We’re now moving towards financial self-sufficiency and have reduced the PPF levy to zero. That decision reflects our financial resilience and confidence in our ability to meet current and future obligations.

Operationally, our immediate priorities are clear. We are focused on delivering existing commitments effectively, including the implementation of the various PP and FAS specific provisions in the Pension Schemes Bill.

At the same time, as the weight of pension provision shifts towards DC and CDC and DB schemes give increasing consideration to running on, far from diminishing the PPF’s role as a safety, these developments accentuate the need to think more holistically about the PPF’s role as a pensions lifeboat. And so more responsibility inevitably falls on the PPF to deepen its own understanding of how systemic pensions risk might evolve in the decades ahead. That means focusing again on our modelling and risk analysis capabilities, and strengthening further our collaboration across actuarial, investment and policy teams.

Asset-liability management sits at the heart of this work. The actuarial and investment functions at the PPF operate in close partnership, ensuring that our investment strategy reflects not only current liabilities but also the uncertainty around future claims.

Stability in the DB universe allows us to think more strategically about how the pensions landscape is evolving and the emergence of new models for managing pension risk. In this environment, our role is to ensure that we make the best possible use of our resources in support of member protection.

Ultimately, pensions are about people, not just balance sheets. Having seen one DB system wind down before, I am convinced that the choices we make now will echo for decades.

Findings from MGAs and Actuaries in 2026: The State of the Market* show that MGAs are deploying actuaries across a wide range of commercial and analytical activities, often in ways that differ markedly from traditional insurer models. Rather than centring on compliance or reserving oversight, actuarial input is most frequently applied in areas closest to business performance.

More than 70% of respondents use actuarial analysis for underwriting performance reviews (72%) and pricing adequacy (71%), while claims development and trend analysis is used by over two thirds of MGAs (67%). These activities sit at the core of day-to-day underwriting decision-making and portfolio steering, indicating that actuarial capability is becoming deeply embedded within MGA operating models.

The survey found that the average MGA uses actuarial expertise across five different functional areas, suggesting a breadth of application that goes well beyond narrow technical reviews. Respondents highlighted particular value in the ability to rapidly translate claims experience and reserving insight into pricing adjustments, underwriting strategy and portfolio actions.

This emphasis on fast feedback loops stands out as a defining feature. Several MGAs pointed to the importance of shortening the time between emerging claims signals and underwriting or pricing responses – a priority that reflects the pace at which MGA portfolios evolve and the expectation from carriers for early visibility of performance shifts.

Cormac Bradley, Senior Actuarial Director at Broadstone, commented: “What’s striking is how firmly actuarial work in MGAs has moved into the commercial engine room. In insurers, actuarial activity is often heavily shaped by regulation and governance cycles but, with MGAs, we’re seeing actuaries embedded much closer to underwriting decisions, with a clear focus on speed, relevance and performance impact.”

The findings also suggest that MGAs increasingly value actuarial insight that is iterative, forward looking and operational, rather than retrospective or episodic. Uptake is highest where actuarial teams work alongside underwriters and claims specialists, enabling rapid interpretation of loss trends, validation of pricing assumptions and proactive portfolio management.

Cormac Bradley added: “MGAs that are scaling successfully tend to prioritise how quickly insight flows from claims and reserving into pricing and underwriting actions. That speed of feedback is becoming a differentiator – not just for performance management, but for credibility with carriers and reinsurers.”

This aligns closely with Broadstone’s experience supporting MGAs and delegated authority underwriters, where growth often drives demand for more embedded, responsive actuarial capability that enhances decision-making without slowing the business.

The findings point to a sector that is professionalising rapidly, with actuarial expertise evolving from a peripheral technical input into a core commercial capability – shaped by the needs of MGAs rather than inherited wholesale from insurer operating models.

* The full report can be downloaded here

US stocks closed higher yesterday, but trading volumes were notably light. Normally, that might be put down to an Easter lull, but this time it looks more like investors struggling to decide how to trade the current environment. Futures are pointing to a softer open this afternoon, and we expect pressure to build on stocks as the day progresses if we move closer to Trump’s deadline without any sign of a deal or even a temporary ceasefire. Rate expectations in the US have been just as unsettled as equity markets in recent weeks, with traders now pricing in no change through 2026. The scale of recent swings means it would not be surprising to see expectations shift again later today as events unfold.

Broadcom announced two longer-term developments after yesterday's close, including a new five-year agreement to develop and supply future generations of TPUs and networking components to Google through 2031. The deal includes revenue commitments across that timeline, which should help ease some of the recent nervousness around TPU competition and give a clearer signal that its largest customer sees meaningful demand visibility well into the future. The company also expanded its collaboration with Anthropic to 3.5GW of AI compute coming online from 2027. We already saw upside to medium-term revenue and profit expectations off the back of recent results; these new deals help underpin that idea if deployment ramps as planned.

Oil prices are creeping higher this morning, hovering near levels not seen since 2022. Oil has effectively become the key transmission channel for broader market risk, with moves now feeding directly into everything from bond yields to equity sentiment and even gold prices as investors try to gauge how far the conflict could hit global energy supply. With Iran warning it could escalate attacks on Gulf energy infrastructure if the US targets civilian assets, oil is increasingly acting as the primary driver of volatility heading into today’s deadline.”

The original guide was published in 2021 at a time when the understanding of good practice was moving quickly and some indicators were then intended to be stretching, aiming to drive the rapid improvement in standards.

In this updated version, expectations that were previously aspirational are now generally considered a core part of investment consultants’ offerings. By recognising the growth in understanding of climate issues and the evolving expectations of advisors, the updated guide captures changes in what may be expected of leaders.

The Guide seeks to recognise the important role that investment consultants can play in supporting asset owners to keep abreast of changing regulatory expectations and the complex interplay of climate competency with related environmental/natural and social factors.

In updating the Guide, the ICSWG consulted with and received feedback from a broad range of industry stakeholders including Pensions UK, the Pension Regulator and the Trustee Sustainability Working Group.

Commenting on the Guide, Helen Prior, workstream chair and Client Director at Mercer, said: “This Guide provides examples of how investment consultants can demonstrate that their firm and staff have the expertise, tools and thought leadership to support asset owners when assessing climate related risks and opportunities. We hope the refresh and fresh input from the Trustee side helps to keep it relevant for asset owners in 2026 and beyond.”

Mette Charles, workstream member and ESG Research Lead at Aon, said: “This Guide is designed to give asset owners of all profiles, a reference point when thinking about ways to assess if their advisers are well equipped to support them on their climate journeys.”

Simon Jones, Co-chair of the ICSWG, Head of Responsible Investment at Hymans Robertson, said: “As the understanding of climate-related issues continues to evolve, it’s important that asset owners can effectively evaluate the capabilities of those giving them advice. Updating the framework to reflect changing expectations is therefore vital to ensure that evolving best practice continues to be integrated into advice. The input we have received from asset owners and other stakeholders has been critical to this process and we hope the guide will remain a helpful and widely used resource.”

Bobby Riddaway, Chair of the Trustee Sustainability Working Group, said: “The Trustee Sustainability Working Group was formed to help to raise standards and drive change in sustainability practices across the industry. We are pleased to have provided input into the revised version of the guide and bring the asset owners perspective to expectations of consultants.

“When the Guide was first introduced, I was working in a medium sized consultancy, and the leading expectations set a high bar. It’s encouraging that many of those leading standards are now considered to be business as usual suggesting that practices have improved over the last five years – we want that to continue. At the TSWG, one of our goals is to focus on scalable solutions for all schemes so industry produced resources like this offer all trustees the ability to challenge and hold their advisors accountable.”

Drawing on insights from both its ongoing campaign to speed up pension transfers and the recent joint release of a report examining the personal pensions market (in conjunction with other leading providers), PensionBee sets out the four key reasons behind pension transfers stalling in some corners of the industry - and what needs to change to fix this.

1. An outdated legal time limit for transfers

The UK's statutory deadline for pension transfers hasn’t changed since the nineties. A six-month limit that was designed as a backstop has, in practice, become a benchmark that’s let poor performance go completely unchallenged.

PensionBee’s own transfer data for 2025 shows that whilst the fastest transfers took just five days, the slowest - including those from Cushon Master Trust and Creative Pension Trust, XPS Administration, LGPS and Capita - took between 47 and 90 days on average.

With the UK pension system overseen by two separate regulators - the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) - it’s notable that the slowest are schemes overseen by TPR, where there is the use of third-party administrators that are not caught by regulation. This divide creates a pension transfer lottery for savers, with their experience determined largely by which type of scheme they happen to be in, and which regulator they sit under.

The fix: Amending the legislation to a limit of 30 working days for straightforward defined contribution pension transfers across the whole industry would move pensions more in line with the rest of financial services, and meet modern consumer expectations. It would bite across all schemes, regardless of the regulator.

Setting a clear expectation would create accountability for pension providers and, by ending the transfer lottery, would empower savers giving them the certainty they need to engage with their retirement.

2. Misapplication of ‘amber flags’

The current transfer regulations - the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 - introduced a red and amber flag system designed to protect savers from scams. But whilst well-intentioned, the rules are too widely drafted. Some providers and third-party administrators are misapplying amber flags to perfectly legitimate transfers, for reasons such as the mere ‘presence of overseas investments’ in the destination providers’ funds, or the presence of incentives.

This misapplication presents savers with significant administrative hurdles to jump - extensive questionnaires, scams calls and safeguarding appointments with MoneyHelper, before they can move their own money. Some become frustrated and overwhelmed, others second-guess their decisions, and many give up completely. This type of ‘sludge’ practice will continue until the drafting of the legislation is fixed to remove any ambiguity.

The fix: While consumer protection is paramount, scam prevention rules must be applied proportionately, and not cause unnecessary barriers for the large volume of legitimate transfers. The Department for Work and Pensions (DWP) should amend these regulations, so that providers and third-party administrators stop unnecessarily delaying perfectly legitimate pension transfers.

Transfers to regulated, well-established schemes on an approved cleanlist should be exempt from excessive, tick-box scam questionnaires or unnecessary scams calls or appointments, allowing consumers’ rights to be respected. A streamlining of industry processes would allow providers a greater focusing of resources on genuinely high-risk transfers.

3. Paper-based processes and legacy systems

In an age of instant, digital verification, many legacy providers still insist on archaic methods, using physical ‘wet-ink’ signatures, paper transfer forms, and asking for physical ID to be sent to them in the post. This forces savers into a time-consuming loop: They have to wait for a form to arrive, sign it, then post it back. As well as adding days or weeks onto what should take seconds, it also creates added failure points. If the signature doesn't perfectly match a file from 20 years ago, for example, the transfer can be rejected, and the clock resets.

Some schemes, especially the TPR-regulated trust-based ones, have simply failed to transition from these manual processes to new IT infrastructure and systems. Combined with a lack of operational resources to process pension transfers and poor administration support services, this results in excessive transfer times.

By contrast, many modern providers using a digital platform to facilitate electronic pension transfers (e.g. the Origo Transfer Service) routinely complete transfers in under two weeks.

The fix: A digital-first presumption, where digital journeys become the default, making the process transparent from end to end, and requiring firms to "comply or explain" if they insist on manual paperwork. The technology and processes exist, are proven and already widely adopted across industry.

4. No accountability for poor performance

There is no legal requirement for providers to publish their transfer performance data, so while the best performers tend to disclose voluntarily, the slowest can hide their times, making it difficult for consumers to fairly compare different providers and make informed decisions.

Without clear service standards, there are few consequences for providers that consistently delay transfers, and little incentive to improve.

This is backed up by public demand, with 74% of consumers stating they want providers to be required to disclose their actual transfer times. Providers with slow processes face little consequence beyond reputational damage, which is often limited because consumers rarely have visibility of comparative transfer times across industry.

The fix: Greater transparency would create accountability, so all pension transfer times should be published as a service metric - this could be incorporated into the service metrics as part of the TPR and FCA’s Value for Money framework. Consumers should be able to directly and meaningfully compare the performance of different providers. Exposing this data holds poorly performing providers to account for their delays, shifting the market away from a system that currently rewards inefficiency.

Lisa Picardo, Chief Business Officer UK at PensionBee, said: “Year after year, millions of savers try to take control of their retirement savings, but they find themselves blocked by outdated processes, unnecessary red tape and excessive delays, unable to move their hard-earned money to the pension provider they choose.

“When attempts to take control of one's finances are met with obstruction, sludge or silence, trust in the entire pensions industry is severely eroded. At best, this represents an unreasonable barrier, hindering consumers’ ability to make timely decisions about their financial futures. At worst, it can have a severe emotional and human cost, actively discouraging savers from engaging with their retirement savings altogether.

"That is why we, and other leading personal pension providers, are calling on the Government to update the statutory transfer deadline to 30 working days. This is a clear, universally enforceable standard that reflects modern consumer expectations. Once this is in place, everything else will follow. The delivery of efficient pension transfers at scale can already be supported by the digital infrastructure that exists.

"Fast and secure transfers are entirely possible and already happening at scale. Many providers prove it every day. What is missing is the legislative framework to drag those that aren’t keeping up into line, and to make smooth and efficient pension transfers the norm for everyone.”

The big concern will be about further damage to energy facilities across the Gulf. The repair work is already likely to take years, and further destruction is likely to keep oil and gas prices elevated for even longer. A barrel of Brent crude has jumped sharply, reflecting these worries, and is trading back up at $107 a barrel. European and UK gas futures have also jumped by more than 5% and are set to stay highly volatile. Around a fifth of global LNG supplies are usually transported through the Strait of Hormuz, but it remains largely impassable, and it’s becoming clear that there is going to be no easy exit from this war, with a lack of planning increasingly evident.

The closure of this small waterway has big consequences for a raft of industries. It has also tightened the supply of billions of dollars’ worth of petrochemical products which usually flow through the Strait. Prices of plastics and polymers have headed to highs not seen for four years, and this is already having an impact on the price and availability of household goods. Cleaning products manufacturer McBride, which makes Oven Pride, has warned that its costs are rising and it is seeing the first signs of supply shortages due to the war in Iran. Its own packaging supplies have seen raw material costs shoot up, which are being passed on, and supply chain snarls are disrupting operations. The issues have been compounded by increases in energy and freight costs across the business. This experience could be the precursor to problems to come for swathes of businesses reliant on the packaging industry.

Governments have been left scrambling to try to limit the impact on companies and consumers, with more rationing of energy likely to come into play. The UK government has held off announcing short-term support for sections of society which will be worst hit by the ramp-up in energy bills, with specific help not expected until the autumn.

Public finances are squeezed, and Trump’s latest comments haven’t helped. UK 10-year gilt yields have shot back up above 4.8%, making government borrowing costs even more onerous. The Middle East is the world’s hotspot right now, as thousands more US troops head to the region, and the heat is radiating across the globe, with inflation set to turn steamy and difficult to handle.

As the great Easter getaway begins, drivers will be counting the cost of the conflict. Diesel prices have jumped by around 27% since before the outbreak of the war with Iran, while petrol prices have risen by around 13%. The increases will be painful on the pocket. For the average 55-litre family car, it'll cost around £11 more than before. At this stage, with the government still mulling how to alleviate the pain of the energy shock, there could still be phased in hikes to fuel duty, as planned, from September. So, there may be shorter trips planned ahead, and fewer chocolate treats bought along the way. For those staying at home for the Easter break and planning holidays later in the year, there's set to be a fresh scramble for seats, as holidaymakers switch from routes to and via the Middle East to European destinations, pushing up prices.''

Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: “The Hong Kong property insurance market is expected to grow during 2026–30 as insurers reprice fire risk, refine catastrophic accumulation, and expand digital distribution. This growth relative to the broader general insurance market’s 6.3% CAGR trajectory implies a stronger expansion profile for property lines.”

The deadly Wang Fuk Court apartment complex fire in late 2025 crystallized risk accumulation in high-rise estates and triggered industry-wide operational responses. Meanwhile, ongoing climate-related events such as typhoons and black rainstorms have reinforced the case for comprehensive coverage and tighter underwriting. Looking ahead, premium hardening in fire-related lines and stricter treaty terms are expected to support growth as insurers reprice for severity risk, enhance risk management, and lean on strong reinsurance programs and capital buffers to sustain capacity for property risks.

Insurers in Hong Kong faced record catastrophe payouts and higher loss costs due to severe weather conditions. Property damage claims remain a major concern among general insurance lines, alongside personal accident & health (PA&H) and liability. Despite catastrophe losses in 2025, the property insurance combined ratio is expected to be at 84.8%, keeping the sector profitable.

Sahoo adds: “While insured losses in Hong Kong were manageable, regional catastrophic events continue to test capacity and accelerate innovation. Insurers are expected to reassess risk retention, reduce capacity for higher-risk profiles, and increase deductibles, especially for high-rise and renovation exposures.”

With premium increases anticipated for fire-related policies and stricter exposure controls post-event, property lines are set for pricing-led growth as underwriters refine deductibles, exclusions, and retention strategies in response to frequency and severity risk in dense urban settings. Stable capitalization, reinsurance utilization, and regulatory reforms anchor market resilience. While the growth of property insurance will be supported by a strong reinsurance hub in the country, the new risk-based capital regime and progress on IFRS 17 will bolster financial discipline.

Sahoo continues: “Alternative risk transfer and capacity-building will support property risk appetite. Catastrophe bonds will reinforce regional coverage for perils including typhoons and earthquakes, while government incentives on extended insurance-linked securities (ILS) grant schemes and streamlined financing for subcontractors will help stimulate issuance. Captive market growth will strengthen enterprise risk retention strategies and diversify capacity supporting complex commercial risks. Hong Kong’s growing ILS platform, emphasis on climate resilience, and regional DRF cooperation highlight the role as a risk-transfer hub that can mobilize capital and analytics to close protection gaps.”

Coordinated relief measures, including premium holidays, advance payments, simplified documentation, and emergency support, were rolled out rapidly by insurers, bancassurance partners, and regulators to reduce immediate financial strain and maintain coverage for impacted policyholders of the Tai Po fire. Such proactive actions foster consumer confidence and support industry growth.

Sahoo concludes: “Hong Kong’s property insurance market is transitioning into a higher-quality growth phase. The catastrophe experience in 2025 is catalyzing disciplined underwriting, reinsurance recalibration, and stronger risk selection, while regulatory fire-safety upgrades and resilient housing activity have deepened protection. With reinsurers absorbing a material share of extreme losses and capital levels remaining sound, carriers are positioned to pursue sustainable growth during 2026-30.”

Maurice Titley, Commercial Director Data & Dashboards at Lumera: “The fact that deferred memberships are growing far faster than active memberships shows that job switching, rather than new savers entering the system, is now the major driver of growth in pension pot numbers. As the labour market becomes more flexible and careers involve multiple employers, this means that individuals are building up multiple small pension pots over time. This trend will continue to increase administrative complexity and raise costs for providers while it can also make it harder for savers to keep track of their retirement savings, increase fees through duplicated charges and ultimately lead to poorer retirement outcomes if pots are lost or forgotten. This is exactly the issue that the Money Helper Pensions Dashboard aims to solve by giving savers a clear view of all of their pension savings in one place. This should stimulate greater retirement planning, encourage consolidation and support savers in their decision-making processes. The increase in both employee and employer contributions is an encouraging sign that pension saving levels are continuing to rise, reflecting both wage growth and the maturing impact of automatic enrolment. As contribution levels rise over time, the importance of consolidation, data quality and digital infrastructure becomes even greater. Implementing best-in-class software and administration platforms will be essential to help providers manage this complexity while still delivering good member outcomes.”

Funded occupational pension schemes in the UK: April to September 2025

Our regular contributors give their views on current events including, amongst others, Rupa Pithiya from Bolton associates continues her series interviewing actuarial contractors talking to Paul Moorshead and Alex White from Gallagher quotes Bob Dylan with his article on the times they are a changing.

Hopefully by the time we welcome you back next month Operation Epic Fury, as they call the war with Iran, will be a thing of the past.

While tornadoes often dominate the headlines, the most significant SCS losses are caused by hailstorms, which are estimated to account for as much as 50%-80% of all losses. Again, the US is the global hotspot for these events, as well as the top loss location for hail claims, but Allianz Commercial analysis shows many other regions have also suffered substantial hailstorm damages. Building resilience against this peril is therefore not a nice-to-have but needs to be on the agenda of every company with exposed assets in high-risk areas. But addressing this peril requires more than traditional scenario planning. New approaches leveraging AI are able to identify physical vulnerabilities in advance, enabling proactive risk mitigation to build resilience.

Thomas Lillelund, CEO of Allianz Commercial, comments: “Severe convective storms are still often viewed as a ‘secondary peril’, yet their cumulative losses now rival – and at times exceed – those of primary perils like hurricanes. This reality highlights the urgent need for businesses to reassess their risk exposure and strengthen operational resilience through proactive, locally informed measures that limit both physical damage and disruption.”

Losses from severe convective storms fueled by inflation and expanding footprints
SCS exposures have been intensified by population growth and development into hazard-prone areas. Rapid urbanization, aging infrastructure and assets, and building codes out of step with current exposures can all heighten the risk and value of losses. The limited spatial footprint and brief duration of SCS belie their capacity for concentrated destruction, particularly in densely populated regions, making them an increasingly important driver of economic and insured losses. After hail, damaging winds are the second major loss driver, mainly tornadoes and derechos. Severe hailstorms primarily impact buildings – especially roofs – and all kinds of vehicles, which are major drivers of expensive insurance claims. The damage to physical assets from hailstones can be extensive. A baseball-sized hailstone can carry the same kinetic energy as a Major League ‘fastball’, reaching speeds of up to 100mph (160kph) or more. Hail-related losses are not only growing in frequency but also shifting in character. What was once considered routine property damage now increasingly involves high-value assets, from aircraft fleets to solar installations, driving claim severity to levels that demand a fundamentally different response, Allianz Commercial analysis shows.

Inflation has driven up the costs of rebuilding and repairing property, an increase that is compounded by supply chain disruptions such as shortages in skilled labor and materials. A clear example of inflation’s effect can be seen in the case of roof replacements, which are a significant factor in insured losses from SCS. Since the year 2000, the cost of asphalt roof replacements has reportedly surged by 250% in some regions, with costs rising 45% in the last five years alone, according to Willis Re.

Risk mitigation a pressing priority for businesses
Mitigation measures for withstanding SCS with minimal damage will vary depending on the nature of a business’s activities and the local weather systems it is subject to. A data center in Tornado Alley in the central US will need different resilience strategies than an automotive dealership in hail-prone northern Spain. Scenario analysis is essential for assessing risk exposure and building resilience to climate perils. Instead of reacting to losses after a major storm, organizations can now use AI-supported insights to identify weak points in roofs, facades or critical equipment and prioritize upgrades that minimize future damage. This helps organizations understand how different climate futures could affect their assets, operations, and long-term performance. Scenario analysis can also reveal hidden vulnerabilities, identify possible tipping points, and show how risks may change over time. This forward-looking approach strengthens decision-making by allowing organizations to test adaptation options, focus investments, and design strategies that remain effective under multiple future conditions.

“Traditional catastrophe models have long struggled to capture property-specific risk factors, such as roof type and asset value, or the cumulative effects of hazards like hail on building envelopes. As AI becomes embedded in core risk processes, its most meaningful benefit for customers is its ability to support smarter, evidence-based resilience strategies that adapt to changing weather patterns, rather than relying on historical norms. A data and AI-driven risk management approach is the future and will be essential for organizations aiming to thrive in an increasingly volatile climate environment,” explains Michael Bruch, Global Head of Risk Advisory Consulting Services at Allianz Commercial.

Allianz Severe convective storms - Trends, impacts, and pathways to resilience

The higher share of transactions exceeding $10 billion also propelled the value of completed deals in the first quarter of 2026 to a five-year high of $438 billion – a dramatic jump of 155% compared to the same period in 2025. In the first quarter of 2026, 56 large deals (valued over $1 billion) were completed, marginally higher than the previous quarter and an increase from 40 deals in the first three months of 2025.

Run in partnership with the M&A Research Centre at Bayes Business School, the data also shows that a total of 215 deals valued over $100 million were completed worldwide during the first three months of 2026. This is a 32% increase in volume compared to the 163 transactions closed in the same period last year, and the fifth consecutive quarterly rise.

Based on share price performance, global dealmakers achieved a market outperformance, as companies making M&A deals outclassed the wider market by +2.5pp (percentage points) for acquisitions valued over $100 million completed between January and March 20261. This is a marked improvement compared to the previous quarter when acquirers underperformed the MSCI World Index by -13.9pp.

Jana Mercereau, Head of Europe M&A Consulting, WTW, said: “Mega transactions have re-emerged with a vengeance. Well-capitalised dealmakers have returned to the market with renewed confidence, taking advantage of improved M&A conditions to pursue large strategic transactions to scale operations, bridge capability gaps and secure critical AI-enabling technologies.”

European dealmakers led the M&A sector with a strong performance during the first quarter of 2026. Based on share price performance, European buyers outclassed companies not involved in M&A activities by an impressive +6.0pp (percentage points), with 40 completed deals. UK acquirers mirrored the wider European trend with a positive performance.

In contrast, Asia-Pacific buyers were -3.4pp below their regional index with 49 deals completed in the first quarter of 2026. With 21 transactions already closed in the first three months of 2026, Chinese buyers maintain their current form of increased deal activity following the record lows of 2024. North American acquirers also underperformed their index by -5.4pp, with 117 deals completed in the last three months, compared to -16.1pp and 96 deals in the final quarter of 2025.

Mercereau said: “Pent-up demand, a favourable regulatory environment and healthy balance sheets have reawakened animal spirits, driving the value of dealmaking close to all-time highs. The duration and scale of the Middle East conflict, however, risks denting deal momentum, with corporate executives likely to stretch timelines and deepen due diligence.

“Boardroom confidence remains strong, for the time being at least, as dealmakers normalise heightened geopolitical risk and appear resolved to ride through the bumps and persist with strategic deals.”

1 The M&A research tracks the number of completed deals over $100m and the share price performance of the acquiring company against the MSCI World Index, which is used as default, unless stated otherwise.

Upcoming Pension Schemes Bill requirements mean trustees must urgently assess whether continuing, consolidating or winding up is in members’ best interests

The DC pensions market is changing - and changing quickly. New figures from TPR’s DC landscape analysis show a further 15% drop in non-micro DC and hybrid schemes over the past year, matching the steep reduction seen in 2023-24. This represents the largest proportional decline to date, signalling a continued shift toward larger, better-governed schemes capable of delivering stronger returns and an improved experience for savers.

In a new blog published today, Kim Goodall-Brown, TPR’s Director of Defined Contribution and Master Trust Supervision, sets out why trustees of smaller DC schemes must now take a clear-eyed look at their future. She acknowledges that, for many, the decision to consolidate is not straightforward - but stresses that securing the best possible outcomes for members must be paramount.

Kim notes that the Pension Schemes Bill, expected to become legislation soon, will introduce new and significant legal duties for most schemes providing DC benefits. These include providing a default guided retirement solution, undertaking a new value for money assessment that requires comparison against other schemes or benchmarks, and facilitating small pot transfers for auto-enrolment members with deferred pots of £1,000 or less.

“Running a smaller scheme is becoming more complex, more demanding and more resource-intensive,” Kim writes. “Trustees need to consider now whether they can continue to meet these higher expectations - or whether members would be better served through consolidation into a larger scheme with stronger governance and scale.”

She highlights that for many small schemes, the cost and administrative burden of meeting the new requirements will increase significantly. At the same time, larger schemes are better positioned to invest in member communications, data quality, operational resilience and long-term investment strategies. Taken together, these factors mean trustees must urgently assess whether continuing alone remains the right choice.

Kim encourages trustees to consider both consolidation and wind-up options. Consolidation into a master trust may offer better long-term value when taking into account future compliance costs and the potential consequences of breaches. For some schemes, winding up may be more appropriate. TPR has published updated guidance to support both routes, including new materials for trustees considering a transfer to a master trust and refreshed wind-up guidance.

She stresses that these decisions take time -and trustees cannot wait until new duties take effect. For example, data collection for the value for money framework is expected to begin in 2027, meaning schemes must begin preparations well ahead of this.

Kim concludes that TPR will continue supporting trustees and providing clarity as secondary legislation develops.

Read the blog: DC scheme consolidation: why trustees must take action now

Relief is showing up in oil prices, with Brent crude, the benchmark, dropping below the $100 a barrel mark. However, at this level crude is still around 50% higher than in mid-February before tensions with Iran seriously ratcheted up. This signals that scepticism still remains about Trump’s claims of progress, and worries persist about how extraction from the conflict is still set to be complex. Even if the war ends in weeks, the damage wreaked to energy facilities in the region will take years to repair. Iran is also now flexing more control over the Strait of Hormuz, planning tolls on ships, so freight costs will rise even as it reopens.

So, despite today’s relief wave on markets, deep problems remain and ministers are trying to work out how to offer a salve to consumer businesses. Keir Starmer is under pressure to deliver, so his briefing today isn’t just focusing on the military capabilities the UK is sending to the Gulf, but the support he is sending to households amid the crisis. With energy bills for those not on fixed tariffs set to shoot up in July, prices at the pumps marching higher, mortgages and potentially rents set to rise, and food prices likely to go up, households are bracing for a toxic shock of higher costs. However, the government’s hands are tied to some extent by stretched public finances. It has to keep investors in government debt on side to prevent gilt yields rising and borrowing costs shooting higher. So, it’s likely to be poorer households, who spend a greater portion of their budgets on essentials, who will be first in line for support.

OpenAI’s mega fundraising round, which gives it the whopping valuation of $852 billion, has pumped optimism into the tech sector. The enthusiasm from private investors and institutions to own a slice of OpenAI, before any potential IPO, is like a rising tide lifting all ships. This is the largest funding round ever completed and is larger than any stock market flotation. The enthusiasm from private investors and institutions to own a slice of OpenAI, before any potential IPO, is like a rising tide lifting all ships. It’s another example of the early opportunities investing in private markets can bring before firms make a public appearance on exchanges.

Howden IAL will give clients access to deeper expertise, clearer technical insight and a more scaled advisory platform. It combines BW’s longstanding strength in delivering outsourced insurance actuarial services and consultancy with the Hymans IFS team’s experience supporting insurers with strategically important actuarial and risk projects, creating a best-in-class adviser for core insurance actuarial and longevity needs.

The formation of Howden IAL expands the range of markets and clients served across Howden’s global platform, supporting the group’s ambition to build a market-leading insurance advisory capability with international reach.

Across the combined practice, Howden IAL will offer insurers support on pricing, capital allocation, reserving, risk and investment strategy, model validation, ALM and the management of longevity risk. The team’s collective experience will enable insurers to navigate increasingly complex regulatory, capital and market environments with more confidence and stronger specialist support.

The formation of Howden IAL brings together a team of around 90 specialist consultants, significantly increasing their capacity to support insurers across the full spectrum of insurance actuarial and longevity needs and creates new opportunities for colleagues joining Howden, reflecting the Group’s investment in high-quality actuarial and risk talent.

Glenn Thomas, CEO and Global Practice Leader, Health & Employee Benefits, Howden, said: “This is an important development for our business and for the market. By bringing together BW’s longstanding insurance actuarial capability with the Hymans Robertson IFS team’s proven expertise in delivering strategically critical projects, we are creating a best-in-class advisory proposition for clients. This move is not just about capability; it is also about people. By uniting two high-quality teams, we are investing in their long-term development and strengthening our ability to support clients with deeper insight and a more distinctive proposition.”

Scott Eason, Managing Partner, Howden Insurance Actuarial & Longevity, said: “Today is a milestone moment for our business. By uniting two outstanding teams, we are creating an advisory capability with the breadth and depth to support every critical client need across the insurance landscape. This is a significant step in Howden’s long-term ambition to build a world-class insurance advisory practice.”

Jon Hatchett, Senior Partner, Hymans Robertson LLP said: “We are proud of the strength and reputation of our IFS team and are confident that the newly formed team’s combined skills and Howden’s global reach will deliver a broader service offering for insurance clients. At Hymans Robertson, as an independent partnership, and Club Vita, we’ll continue to focus on our long-term plans across the pensions, risk transfer, investment and retail wealth markets, where we see great opportunities for innovation with our clients.”

The transaction is expected to complete in the spring of 2026.

Brent crude, the international benchmark, has dropped to $107 a barrel, but even at this level it remains painfully high for economies to deal with. Asian countries highly reliant on energy imports are still bracing for prolonged disruption, which is partly why South Korea’s Kospi and Japan’s Nikkei index are still deep in the red.

Although futures markets indicate a bounce higher for the Footsie and Wall Street, reading too much into Trump’s latest comments may be unwise. He appears to be driven by a desire to calm market tension and bring down energy prices as the mid-term election campaign looms. Trading is set to stay volatile amid conflicting signals, indicating that this is a complex conflict which will be difficult to resolve. Israel’s Benjamin Netanyahu has his own agenda and has suggested the military aims are only halfway to being achieved, and it’s likely to be hard going forward.

Iran is still deploying drones across the region, hitting a huge oil tanker docked in Kuwait. Attacks on energy infrastructure in the region will take years to repair, which looks set to keep energy prices elevated even if there is a swift resolution. Strikes are now hitting wider targets, with aluminium producers in Bahrain and the UAE affected. The damage has pushed aluminium prices close to the highest in four years, which looks set to increase costs for manufacturers of a range of products - from small electronic goods to vehicles. Supplies were already constrained due to the blockade of the Strait of Hormuz, and concerns are rising about longer-term availability of the metal.

Costs for UK consumers were already rising just as the conflict broke out, with shop price inflation edging higher. It rose to 1.2% in the twelve months to March, above February’s reading of 1.1%. As commodity costs rise again, it will pile pressure on producers. They’ve already had to absorb significant increases over the last few years, and there’s a limit to how much they can delay passing these higher overheads on to consumers. The increase in the minimum wage, higher payroll costs, and the impact of rising packaging taxes are also increasing the burden for manufacturers and retailers. Adding to the expensive mix are sharply higher energy costs and rising freight prices.

As consumers prepare for higher prices, the Bank of England will be watching inflation expectations closely for signs that they’ll demand higher wages to compensate. But with the economy already stagnating before the conflict began, and demand for goods and services so sluggish, the risks of a wage spiral emerging do not at this stage look too severe. Nevertheless, financial markets are still pricing in two to three rate hikes this year, although much will depend on the duration of the Iran conflict.”

UK stocks look set for a choppy start, as the FTSE 100 opens slightly higher this morning. With only a light run of company updates ahead, geopolitics is likely to be the main driver of sentiment. Investors are also adjusting to a backdrop where interest rate expectations have shifted, with markets now firmly pricing in rate hikes this year – though we know how quickly these odds can shift.

US markets remain under pressure, with the S&P 500 now 9% below its January peak as investors brace for a heavy week of data. The spotlight will fall on Friday's March jobs report, where payrolls are expected to rebound after February's surprise drop. A busy calendar also brings the ISM Manufacturing PMI, retail sales, JOLTs job openings, and the monthly trade balance, all of which will help shape views on the strength of the economy.

Oil prices jumped about 3% to start the week, with crude holding at its highest level since mid-2022 amid the Iran conflict. Doubts over a quick resolution have grown after Iran-backed Houthi militants stepped up attacks in the region, and the US moved additional troops closer to the conflict. With the Houthis threatening Red Sea shipping lanes and key energy infrastructure, and rumours that Washington is preparing for ground operations, traders are bracing for more supply risk and further price volatility.”

Sonya Fraser, Partner at Arc Pensions Law, said: "The Regulator’s guidance is a useful reminder to trustees of their duties in relation to assessing the impact of the Virgin Media judgment on their own scheme, taking the necessary advice, making informed decisions and ensuring that there is a clear audit trail. The guidance points out that while the remediation will not be available until Royal Assent is given, trustees can instruct their actuaries to start the work now. That is consistent with what we are seeing, particularly for schemes that are preparing for buy-in or buy-out. The guidance builds on the pragmatic stance that has been taken on this issue by the industry to date - including the recent FRC actuarial guidance. For example, it states that the Regulator does not expect trustees to 'carry out exhaustive searches before your actuary undertakes the remediation work'. The Regulator also does not expect to receive reports from trustees regarding the actions that they have taken in respect of remediation."

TPR guidance on retrospective actuarial s37 confirmations

On average, this is the worst kind of environment for the stock market. But investors need not panic. Our analysis shows that stocks often perform well when there is stagflation, just not as well as at other times.

Importantly, there has been divergence in sector performance in these environments and performance between companies is likely to rise, too. There is an argument that the sector allocation of European stock markets could benefit them relative to the US. This would be problematic for many investors, given that the US dominates the global market.

As well as the well-trodden valuation argument, this is one more reason why we believe investors should be wary of passive approaches to investing in global equities today.

As well as weakening corporate fundamentals, the ability of central banks to stimulate demand by cutting interest rates is also hampered. When inflation is high, they typically want higher interest rates to bring inflation under control, not lower. And higher rates risk making the “stagnation” worse. But if they were to cut rates, then that risks sending inflation even higher. There are no easy options.

We compare using 10-year averages rather than fixed rates of growth and inflation because what will have felt like low growth or high inflation to investors isn’t constant over time. It depends on what they will have been used to. This is a less severe definition of stagflation than those that require there to have been a recession (negative growth).

As could be anticipated for the environment described above, stocks often find the going tougher during stagflation-years compared with other environments.

Based on data since 1926, the median yearly real return in a stagflation-year has been about 0%. This is less than investors would typically want from equities over the long-run, but getting close to inflation in a high inflation environment is not a bad outcome. In addition, in about half of these years, they generated a positive real return. And, when these real returns have been positive, they have tended to be strong, averaging about 16%. In the interests of balance, it is worth pointing out that when they were negative, they averaged –14%.

Figure 1: Equities perform well in around half of stagflationary environments, worse than others but should not be ruled out

US real equity returns when inflation and growth are above/below their 10-year average, 1926-2025 calendar year data (number of occurrences in brackets).

When assessed relative to cash, equities come out better, outperforming cash more often than not (in 10 of the 17 stagflation-years). This may be a riskier than normal time for stocks, but it can also be a risky time to sit in cash.

Furthermore, statistical analysis of how stocks have performed relative to cash in stagflation-years compared with the rest of the time indicates there is no significant (in a statistical sense) difference. In other words, any difference could be due to random noise rather than a meaningful relationship.

It is not necessary for the market to have fallen the year before i.e., the good performance being a rebound. In most cases, it followed a year when real returns were positive (second last column in Figure 2)

It is not necessary for interest rates to be cut. We assess this by comparing cash returns with the year before (a lower figure implying rates were cut). In 1979, 1980, 2006 they were raised, and in 2007 they were broadly flat (final column in Figure 2).

Figure 2: Positive (and negative) real returns during stagflation are not conditional on prior year market performance or rate cuts

Calendar years when inflation was above, and growth below, their 10-year averages, 1926-2025.

There is no historical reason why investors should expect stocks to fall, even if we do enter stagflation. There can be lower conviction of strong returns but predicting doom is not appropriate either.

Figure 3: Sectoral performance is mixed during stagflation

US sectoral real equity returns when inflation is above and growth below its 10-year average, 1974-2025, calendar year data.

Figures are shown on a rounded basis. Based on analysis of data on sectors of the US equity market 1974-2024. Calendar years shown are those where both real GDP growth was below the previous 10-year average and CPI inflation was above its 10-year average. Based on Datastream US sector indices. Source: LSEG Datastream and Schroders. Past performance is not a guide to the future and may not be repeated.

While many of these are intuitive, it is important to again highlight the small sample size. When we run statistical tests (see Appendix), the only sectors where performance comes out as significantly different during stagflation-years are the materials and financial sectors.

Figure 4: Regional market composition

The US stands out for its large allocation to the IT sector, which has historically struggled during stagflation. Its communication services behemoths, Alphabet and Meta, are also technology companies in all but sector classification. In contrast, the US allocations to the sectors that have performed better during stagflation are all relatively low in absolute terms (totalling 15%). The US does not look like a candidate for strong performance if stagflation becomes a reality.

On the one hand, the European market would appear to suffer from its large allocation to the industrials sector. Europe has also been very publicly in the firing line for President Trump's tariffs. However, Germany’s plans to increase borrowing to boost defence and infrastructure spending should support many European industrials, especially given the bias towards “buying European” rather than from the US. Overweights to the utilities sector and underweights to IT and communication services could also be beneficial. In principle, the financials overweight is more problematic but, as it stands today, financials are in reasonable shape and benefitting from a steeper yield curve. This will be a sector to keep an eye on.

The UK, a market which has been unloved by global investors for many years, is also an intriguing proposition. Its 16% allocation to the defensive consumer staples sector and 10% to energy are more than double any other major market has to either. Plus, it has barely any exposure to the IT or communication services sectors compared with elsewhere. Like Europe, the UK is overweight financials. While not without risk, there is definite potential for negative perceptions about the UK market’s boring, defensive, nature to turn to its advantage. It also remains cheaply valued compared with overseas markets and therefore has a more favourable starting point.

Japan is weighed down by large allocations to global industrials, which are sensitive to international trade, and consumer discretionary. These sectors make up 44% of the MSCI Japan Index. It also does not have an overweight allocation to any of the sectors that one would anticipate could perform better. There are positive developments in corporate governance in Japan (moves to more shareholder friendly approaches) and valuations are relatively cheap, but the global backdrop is challenging.

Sector allocations are also not particularly favourable for emerging market equities, with overweights in consumer discretionary, communication services and financials.

Whichever market you look in, there will be winners and losers. Sector allocations can provide useful insights into potential risks but it is only by analysing individual company fundamentals that investors can hope to identify those which have the potential to thrive and those which risk underperforming.

Stocks perform worse during stagflation than at other times, but the difference is not statistically significant. Historically, they have outperformed cash and kept pace with inflation. There can be lower conviction of strong returns but predicting doom is not appropriate either. There is always a reason to worry and long-term investors are likely to benefit from staying invested.

Good performance in stagflation is not dependent on the market having fallen beforehand i.e., a rebound. Nor are rate cuts a necessary ingredient. This should provide some comfort to equity investors today.

Performance during stagflation varies a lot between sectors, and across historical episodes. Although, statistically, there is insufficient data to draw firm conclusions, we can add to that with qualitative judgement and intuition. On this basis, the US and Japanese markets look negatively exposed to stagflation risk. Europe and the UK are more interesting propositions. Investors passively tracking the global market could find this uncomfortable, given the MSCI World Index has 70% in the US and MSCI ACWI has 62%. Stagflation could encourage the broadening out trend seen so over 2025 and early 2026 to continue.

While we have not analysed individual company financials within this article, it should be obvious that there will be increased variation in performance at the company-level should we enter stagflation. Balance sheet resilience and pricing power will be important. As correlations among stocks fall and dispersion in returns rise, the potential for active managers to add significant value should rise with it.

£995 in December 2023, with prices having decreased for nine consecutive quarters. However, when compared to annual price falls ranging from 13% to 18% recorded during the previous five quarters, the latest 9% decrease indicates the rate of price deflation is slowing.

While offset by a decrease of 3.2% in January, average prices during the last three months actually saw modest rises in both December (0.8%) and February (0.4%), according to the UK’s longest established and most comprehensive car insurance price index.

Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, said: “The last few months saw modest fluctuations in premiums, but the large scale reductions seen in 2025 appear to have subsided. Looking forward, ripple effects from the Middle East conflict could put upward pressure on UK inflation, owing to supply chain disruption and increased production and energy costs, driving up the cost of motor insurance premiums. However, any rises could be partially offset by a potential reduction in claim frequency if we see a drop in average mileage driven by UK motorists as a result of higher fuel costs.”

Source: WTW / Confused.com Car Insurance Price Index. *Average values rounded to the nearest whole number.

Northern Ireland continues to buck the wider national trend by being the only region to experience an annual rise in prices for the second quarter in a row. Premiums for drivers in Northern Ireland increased dramatically by £113 (14%), from £834 to £947. Northern Ireland now ranks as the second most expensive region in the UK for car insurance, for the first time pushing Outer London into third place.

Drivers in Manchester / Merseyside benefited from the steepest price reductions, with an annual dip of 14% (£132), reducing their premiums from £936 to £804. Drivers in South Wales saw the next biggest percentage drop of 11% (£67), with their premiums decreasing from £614 to £547 during the same period.

Of the regions to experience a reduction, the smallest were seen in Scotland, where drivers saw more modest annual falls ranging from 2% to 4%. South West England remains the cheapest region for car insurance, where average premiums dipped below £500 and now cost £492, with Central and North Wales following close behind at £502.

Source: WTW / Confused.com Car Insurance Price Index. *Average values rounded to nearest whole number.

More locally focused data shows motorists in the Manchester / Merseyside postcode area of Warrington benefited from the biggest annual fall in car insurance premiums, where prices dropped by over 15%. Drivers in the Cheshire town saw premiums decrease from £745 to

£630. West Central London, still the country’s most expensive postcode, saw an annual fall of 6% (£81), with average premiums now at £1,349 compared to £1,430 in February 2025.

Llandrindod Wells in Wales continues to be the cheapest town in the UK with prices on average now costing £438, where prices fell by 4% compared to 12 months ago. Drivers in Shrewsbury now also enjoy average premiums less than £500 for the first time in three years after an annual fall of 6% reduced their premiums to £484, joining Swansea (£498) and the South West towns of Torquay (£476), Truro (£495), Exeter (£474) and Dorchester (£474) in the ‘sub-£500 club’.

Younger drivers continued to benefit from the steepest price falls. Drivers aged 17 experienced the greatest price falls compared to other age groups, benefiting from a significant 23% annual price decrease, reducing their average premiums by £517 from

£2,258 to £1,741. Drivers aged 18 saw the next biggest reduction in annual prices of 14%, taking their average premiums to £2,082.

Steve Dukes, CEO at Confused.com, comments: “While average car insurance prices for new policies have been decreasing for some time and recently hit a three-year low, the pace of these decreases has been slowing. For some demographics, prices have started to increase over the past three months.”

“As this trend continues, it creates opportunities for responsive, competitive insurers to attract new customers. UK drivers are concerned about the worsening cost of living outlook and so ambitious, agile insurers will look to offer a solution and fuel growth.”

1 This latest quarterly data release by the WTW/Confused Car Insurance price Index covers the three-month period December 2025 to February 2026.

Perhaps the most telling move came from government bond markets, which also weakened through the session. Normally, when equity markets wobble, you’d expect bonds to act as a buffer as investors seek safety, but yields pushed higher as markets continued to price in inflation and interest rates staying higher for longer. We know the White House keeps a close eye on the bond market, so pressure will be mounting to secure a deal in the Middle East sooner rather than later.

FTSE 100 futures suggest a small rise at the open, although as we've seen plenty of times lately, that can change quickly. Fresh retail sales data showed volumes slipped 0.4% month-on-month in February, a smaller fall than expected, meaning activity has, for now at least, held on to much of its early-year momentum. But weakening consumer confidence is likely the more telling signal, with the GfK reading dropping to an 11-month low in March as households grapple with the twin threat of higher inflation and softer growth prospects. Markets are currently pricing around a 70% chance of a rate hike in April, but with sentiment already starting to wobble and growing risks to the growth outlook, a pause from the Bank of England could be the more measured prediction.

US markets had a tough day at the office, though futures hint at a modest clawback later today - as ever, though, we know sentiment can shift quickly before the opening bell. It did, however, serve as a useful reminder of why diversification matters. While tech stocks took a hefty tumble, the equal-weighted S&P 500 quietly finished the session broadly flat, suggesting the pain wasn’t as broad-based beneath the surface. Social media names were firmly in the firing line as investors digested a run of jury verdicts linked to mental health and child safety concerns. Both are hugely important issues with clear work still to be done, but yesterday’s narrative that this represents a “Big Tobacco moment” for the sector feels a little overdone.”

Rachel Vahey, head of public policy AJ Bell, comments: “Too many people are currently suffering long delays in pension transfers. There are a myriad of reasons why – from antiquated systems in some workplace pensions, to poorly drawn up regulations that should stop scams but often frustrate transfers, and regulation that still gives some workplace pension schemes a staggering six-month window to complete transfers.

“Regulatory and industry focus has rightly been fixed on improving transfer processes in recent years, helping more people make the most of their retirement savings and, where appropriate, consolidate pensions so they are more straightforward to manage. But the FCA’s recent proposals risk making the situation worse, by lengthening the time to complete transfers and ramping up the frustration caused to pension savers. Given Which?’s research found one-in-ten people already give up on transferring due to the difficulties involved, lumping on further delays will only add to the existing problems with the system.

“Better solutions exist that do not gum up the transfer process. AJ Bell believes the FCA, Department for Work and Pensions (DWP) and The Pensions Regulator (TPR) should work together on developing alternative solutions to ensure pension savers with valuable guarantees and protections fully understand their benefits and the risks of losing them through transfers. This could be in the form of regular communication, such as including this in the annual benefit statement, or in the longer term as part of the information held on Pensions Dashboards.

“The good news is that the FCA has indicated they are still listening to industry concerns. By changing these proposals, the aim must be to build a solution that makes sure more people get the information they need at the right time to consider transfers.”

What are the FCA’s proposals on transfers?

The FCA wants to support non-advised consumers who are considering pension transfers or consolidating defined contribution pensions, by making sure they have the information to make informed decisions. It is concerned these consumers are unknowingly giving up valuable benefits, for example guaranteed investment returns, loyalty bonuses, protected pension ages, or transferring to schemes offering fewer decumulation options or incurring higher charges.

Under the proposals, consumers transferring pensions will be asked if they want a comparison between their current and new schemes. Unless they opt out, they must consent for the new scheme to request information from their existing one. The existing scheme has ten days to provide the details, and the new scheme must deliver the comparison to the consumer within three days.

These proposals could therefore add a lengthy delay to pension transfers. However, very few pensions include the benefits and guarantees that the FCA are worried consumers will lose.

Proposals would not apply to the whole pension market

These proposals would only apply to FCA-regulated schemes, so exclude master trusts and other occupational pension schemes. These types of pension schemes could choose to give the information to any FCA-regulated scheme requesting it – for example a SIPP – or they could simply ignore the request altogether.

Are there alternative solutions?

AJ Bell believes the FCA, DWP and TPR should work together on developing alternative solutions to ensure pension savers with valuable guarantees and protections fully understand their benefits and the risks of losing them through transfers. This could be through regular communication, such as including this in the annual benefit statement, or in the longer term as part of the information held on Pensions Dashboards.

Many early AI adopters report success comes from a combination of cost reduction through automation, increased quality through augmentation and competitive differentiation through addition. As AI becomes more mainstream, effective leaders move beyond solely using it for cost savings and productivity to expanding human capability through augmentation and addition. This drives organizational differentiation through deeper thinking, more innovation and research and development, new ways of connecting with customers, enhanced products and services, and superior user experience.

Effective leaders consider timing, investment levels and expected ROI when making AI adoption decisions. They also set reasonable expectations with key stakeholders.

In February’s Fast Company, Pete Pachal, founder and CEO of The Media Copilot, explains that AI separates routine writing from the work that defines reporting, including building trust with sources, doggedly pursuing leads, assessing crime scenes, attending hearings, judging credibility, drawing inferences without full facts, and inspiring and engaging audiences with novel thought and storytelling.

A similar pattern appears in corporate call centers, where leaders find that AI handles routine tasks, such as retrieving information and filling out forms, freeing representatives to focus on customer relationships and solve more complex problems on the first try. Effective leaders understand and employ the power of AI to shift worker value from ordinary to extraordinary wherever possible.

For example, WTW’s 2025 Artificial Intelligence and Digital Talent Intelligence Report finds that the top five most in-demand digital skill roles globally are software engineer, application developer, data scientist, test engineer and cybersecurity engineer. Newer roles such as full-stack developer, solution architect, machine learning engineer, data engineer, cloud engineer and AI engineer appear in the top 20. AI adopters also report the appearance of roles such as AI ethicist, virtual cultural architect, AI automation engineer and robot trainer. Effective leaders understand these roles may change or fade as AI develops but are needed today and provide a lens into future skill requirements and job opportunities.

WTW’s 2025 Talent Market Trends Dashboard shows that emerging skills vary by industry and geography. For example, in some places, data storytelling, predictive analytics and data visualization represent top emerging skills. In others, the focus is on prompt engineering, data governance management, cyber threat management, risk modeling and demand generation. As previously reported, effective leaders understand that soft skills are as important as hard skills. Critical and analytical thinking, creative thinking, problem solving, judgment, emotional intelligence, resilience, empathetic leadership and self-awareness are crucial as AI technology advances.

WTW’s Suzanne McAndrew shares humans make AI better and AI makes humans better. Today, effective leaders embrace the human + AI partnership to create the extraordinary.

A version of this article originally appeared on Forbes on March 12, 206.

The data indicates that drivers are treating their policies like building blocks - retaining the base layer but stripping away the extras that traditionally provided peace of mind, but also bring additional cost. For example, fewer than half of drivers now carry Personal Accident cover (48%) or Legal Expenses cover (44%).

Nearly one in five (18%) motorists have also either cancelled or reduced their breakdown cover to save money. Despite the prevalence of car financing, only 15% of drivers have Guaranteed Asset Protection (GAP) insurance, leaving them vulnerable to significant debt if their vehicle is declared a total loss.

In a bid to avoid high interest rates associated with monthly installments, 61% of motorists are now paying their insurance premiums and road tax in a single annual lump sum. While this provides a long-term saving, it could place a significant immediate strain on household liquid cash.

John Cassidy, Managing Director of Close Brothers Motor Finance, commented: “It’s clear that motorists are really feeling the pressure of rising costs, and are exploring all avenues to cut back on spending wherever they can.

“While avoiding some insurance add-ons may save money, it does also expose many drivers to significant risk - especially with factors such as gap insurance. Unfortunately, Government policies such as the September rise in fuel duty, and proposed schemes such as the EV pay-per-mile tax continue to place a financial burden on consumers, forcing them to cut corners and leave themselves potentially vulnerable as a result. Working with a dealer to understand all finance options available may present a more efficient way for drivers to understand and manage costs on a monthly basis, making it easier to budget and protect against any sudden price increases.”

“After two days of gains, the FTSE 100 has given back a little this morning as investors seek out concrete signs of progress towards a peace deal between Washington and Iran and the resumption of oil and gas transit through the Strait of Hormuz. So far, the main communication channels appear to be traditional and social media, as well as third-party states. It may take a formal agreement or at least a move to the negotiating table to steady markets further. While the bears may have the edge this morning, there could be bulls waiting in the wings if moves towards a resolution gather pace.

Gold has fallen back below $4,500 per ounce, around $1,000 lower than the peaks seen at the end of January. Interest rate expectations, rather than safe-haven appeal, have been in the driving seat. The inflationary impact of the oil market dislocation has increased the probability of a Fed rate hold until at least October from around 11% to 62% over the last month. Markets now see a 38% chance of at least a quarter-point rise, and when it comes to the possibility of a cut, all bets are off. Things could change quickly if Middle Eastern tensions simmer down, but the longer oil routes remain blocked, the more embedded hawkish forecasts will become.

US stock futures are also trading down this morning after yesterday’s broad-based gains. Outside of the geopolitical stage, weekly jobless figures will be a key datapoint for today, with new benefit claimants expected to rise slightly from last week’s 205k to 211k, still relatively low by historical standards. In recent times, weaker-than-expected labour market numbers have been seen as potential catalysts for rate cuts and greeted favourably by stock markets. However, in the current climate, signs that higher fuel prices and the fear factor are dragging on economic activity could be a negative for equities. Speeches by Fed Vice Chair Barr and Governors Cook and Jefferson are also lined up for today, giving further clues around the outlook for the economy and monetary policy.

Brent Crude is pushing on $105 this morning after bottoming out at nearly $97 in yesterday’s session as traders try and second guess the path of the Iran War.

Turning to natural gas, US gas storage figures are expected to show a 49 billion cubic feet (Bcf) increase after unseasonably mild weather saw stockpiles rise by 35 Bcf in the world’s largest producer and exporter of natural gas. US natural gas prices are down 6.5% year to date in contrast to a 90% rise in the European Union, reflecting the trading bloc’s reliance on imports.”

Matt Britzman, senior equity analyst, Hargreaves Lansdown: “Memory stocks like Micron and SK Hynix look to be having their very own DeepSeek moment, with Google’s TurboQuant (software that reduces the memory needed to run AI models) triggering fears that improving efficiency will structurally reduce hardware demand, specifically memory. But if we cast our minds back, DeepSeek fears were ultimately unfounded, demand for AI infrastructure has only increased, and it proved to be a great buying opportunity for AI names. Improving model efficiency isn’t a new concept, far from it, but it doesn’t need to be feared. Reducing memory per task often enables longer prompts, more users, and higher throughput on the same infrastructure. That dynamic ties directly into Jevons paradox: making AI models cheaper to run tends to increase usage, which can end up driving more, not less, demand over time.”

In the Virgin Media Ltd vs NTL Pension Trustee II Ltd case, the High Court and the Court of Appeal both confirmed that an affected alteration made without this written actuarial confirmation would be void.

This case created uncertainty across the pensions industry. Some salary-related contracted-out schemes may not be able to find such written actuarial confirmation, or evidence that it was obtained, for all the relevant alterations to their rules made during this period. As a result, the validity of those alterations is in doubt. The affected schemes and their sponsoring employers may have significantly higher or lower liabilities than they expected and may have underpaid or overpaid benefits and continue to do so, even though they may have continued to satisfy the statutory standard.

The government has acknowledged that schemes and employers need clarity on this matter. To resolve the uncertainty, it has included remediation measures in the Pension Schemes Bill 2025 (the Bill). These will allow the governing bodies of salary-related contracted-out schemes to validate the affected alterations that are potentially remediable.

An affected alteration is potentially remediable if:

Schemes that have not fully wound up before Royal Assent will need to obtain written confirmation from their actuary that, in their opinion, it is reasonable to conclude that the affected alteration would not have prevented the scheme from continuing to satisfy the statutory standard. In some cases, this will be straightforward given the nature of the alteration, but in others the actuary will need further evidence. Where this confirmation is provided, the alteration is to be treated as having met the requirements of the regulations from its original effective date and so is to be treated as valid.

The Financial Reporting Council (FRC) has provided guidance to actuaries on how to undertake this remediation work in a proportionate and pragmatic manner.

As the Bill has not yet received Royal Assent and remains in draft, this guidance will change. We will update it to reflect the version that receives Royal Assent.

Who this guidance is for

Under the Bill, all the affected alterations of schemes that have been fully wound up or transferred to the PPF or the FAS at the date the Bill receives Royal Assent, will be treated as having met the requirements of the regulations from their original effective date and so are to be treated as valid.

This guidance aims to remind you of your statutory duties and to set out our expectations of the standards required to achieve compliance.

You should establish whether your scheme is affected by the judgments in the Virgin Media case and, if so, decide whether you will use the potential remediation available under the Bill.

You should ensure that you understand the Virgin Media judgments, the potential remediation available in the Bill and the other options for addressing the issue available to your scheme. You may find it helpful to receive training on all this.

You will normally need to seek advice and information from your legal adviser and may need advice and information from your actuary and information from your administrator. This will help you make an informed decision on whether to use the potential remediation available under the Bill and fulfil your fiduciary duties. You may also need to discuss it with the sponsoring employer(s).

If you decide to use the potential remediation available under the Bill, you will need to provide a formal written instruction to your current actuary to undertake the work. This should include the scope of the work that specifies:

You may need legal help to write this instruction.

Occupational pension schemes are under a duty to appoint a scheme actuary under section 47(1) of the Pensions Act 1995. However, if your scheme does not have an actuary, you can appoint a Fellow of the Institute and Faculty of Actuaries to undertake the remediation work.

The Bill does not give a deadline for using the potential remediation available under the Bill. You should agree a practical and realistic timescale for the work with your actuary, according to your scheme’s specific circumstances. For example, it may be beneficial for schemes that are starting a buy-out process to proceed with the remediation work urgently, while others may adopt a timetable that is most efficient and cost effective for them.

You should also discuss the timing with the sponsoring employer(s) as they may have views on when the remediation work should be carried out.

Though the remediation will not be available until Royal Assent is given, you can provide a written instruction to your actuary to start the work now.

If you decide not to proceed with the remediation work immediately, you should ensure that document retention policies will not cause the destruction of relevant records until the matter can be resolved.

The Bill allows the actuary to act on the basis of the information available to them if they consider it sufficient for the purpose of forming an opinion. At the outset, you should speak to your actuary to establish whether they believe they already have sufficient information. We do not expect you to carry out exhaustive searches before your actuary undertakes the remediation work. However, your actuary may request additional information to support their assessment. Depending on the circumstances, this may take many forms, from records of trustee decisions and advice received to historic individual membership data. You should work with your current administrator and the sponsoring employer(s) to determine what information is readily available and discuss with your actuary whether it is likely to be sufficient. You may also need to decide on its format and how it is shared.

There will be situations where your actuary, after conducting the work, cannot currently provide the retrospective confirmation for all the affected alterations you asked them to cover. You should consider the reasons your actuary may have set out for why they cannot provide the confirmation and decide what to do next.

If your actuary needs further information, explore how you could obtain it and the best way to do so. This may include liaising with your scheme’s previous administrators, actuaries, legal advisers, sponsoring employers, trustees and scheme managers.

If it is not possible to provide your actuary with the additional information they need or that is not why they cannot provide the confirmation, you should seek legal advice on the appropriate next steps, considering your actuary’s reasons and your scheme’s specific circumstances.

You do not need to report your remediation actions on this matter to us. We have no statutory functions in relation to the section 37 remediation. If and to the extent it is established that there had been a failure to obtain a section 37 confirmation, but the matter can now be resolved through an actuarial confirmation, any historic breach is very unlikely to be materially significant to us now in carrying out any of our functions.

You should make all the decisions relating to this issue in line with the decision-making procedures in your scheme’s governing documents and record the factors that influenced your decisions. You can find out more about decision-making in our trustee guidance.

You should maintain a clear audit trail for all the decisions, actions and the results of this exercise.

The section 37 confirmations for the changes to the rules should be held with the alterations by whoever holds your scheme’s formal documentation, such as its deed and rules. Any actuarial confirmations obtained under the remediation exercise should also be held by them.

You should keep the sponsoring employer(s) informed of your decisions and provide them with copies of any actuarial confirmations.

As good practice, after Royal Assent is given, you may want to prepare a reactive response on this issue to manage member queries in a clear and consistent way. You may need to update this response once the work is completed.

Where your actuary requires member data to reach an opinion, you may also use this opportunity to assess the quality of your scheme data and improve the data where appropriate. Our ‘Scheme member data quality guidance’ sets out the practical steps and good practice that you can take to meet the expectations set out in the data monitoring and improvement module of our general code of practice.

You should also consider the extent to which any findings in relation to the validity of any affected alteration may affect the funding position of the scheme, in relation to the requirements of the Pensions Act 2004 or otherwise.

Useful links

FRC technical actuarial guidance – This guidance is issued by the FRC to assist the scheme actuary when doing the remediation work.

Nick will pass on his current role as Head of the Firm’s Winchester office to Victoria Snowden.

Jon Forsyth will become Head of Pensions Developments to lead the firm’s response to emerging pensions policy and industry change, ensuring clients receive timely and expert advice. The role will drive horizon scanning, thought leadership and cross firm collaboration, strengthening LCP’s presence and influence across the pensions landscape while overseeing research outputs and engagement with key industry stakeholders. Jon has over 15 years’ experience providing advice to both pension scheme trustees and sponsoring employers and advises some of the UK’s largest pension schemes. He is also Chair of the Society of Pension Professionals Defined Benefits Committee.

The new roles have been created in response to the evolving pensions landscape, with DB schemes now considering a wider spectrum of options. This includes emerging superfund options and the new surplus rules for schemes that want to run on, presenting viable alternatives to more traditional insurance transactions.

Michelle Wright, Head of Pensions Strategy, LCP commented: “DB schemes are facing a broader set of choices and fresh challenges, and the pace of change continues to increase. Against that backdrop, trustees and sponsors need advice that is clear, holistic and grounded in practical experience.

“Our two new roles will bring exactly that and will help ensure clients receive integrated, forward-looking advice across all stages of their journey. Nick brings leading industry experience and strong client relationships, alongside a proven track record of people management. Jon’s industry knowledge and expertise will ensure our firm and our clients stay ahead of developments and are well-placed to navigate risks and opportunities in what is a fast evolving regulatory environment.”

Based on the earnings growth element of the triple lock, the state pension will increase by 4.8% from 6 April, meaning state pensioners are currently in line for an above-inflation boost to their income.

However, this increase means the state pension will be just £23 under the personal allowance limit (£12,570), at which point it would become liable to income tax. As of yet, the government has offered no clear plan as to what this means for state pensioners.

Kate Smith, Head of Pensions at Aegon, said: “In just over a week’s time, state pensioners will receive a welcome 4.8% boost to their income, as the increase calculated by the triple lock formula kicks in from 6 April.

“This year’s increase represents the fourth-highest jump since the triple lock was introduced in 2011 – a system whereby the state pension increases annually at whichever is highest out of CPI inflation for September, earnings growth for May to July, or a 2.5% minimum.

“Those who reached state pension age from 6 April 2016 onwards, and are therefore eligible for the new state pension, will now see their full entitlement increase by £574, going from £11,973 to £12,547 a year.

“While those who reached state pension age before 6 April 2016, and are therefore eligible for the basic state pension, will receive a £439 increase, jumping from £9,175 to £9,614 per year.

“Given today’s announcement that inflation currently sits at 3%, state pensioners may be particularly pleased to see that their increase is above the rate at which costs are rising, indicating their income may be able to go a little further too.

“However, with inflation widely predicted to increase in the coming months as a result of the ongoing conflict in the Middle East, this optimism might not last as long as hoped.

“Another thing that shouldn’t go unnoticed is that the new state pension will now sit just £23 under the personal allowance limit of £12,570. Should the amount cross this threshold when it increases again next year, a portion of the state pension would become liable to the basic 20% rate of income tax. For example – assuming just the minimum 2.5% increase is applied, the new state pension would rise to £12,861 and £58 of tax would be owed.

“While many pensioners already pay income tax because of money from other sources, including private pensions, there has been concern regarding the impact of this on vulnerable pensioners, particularly those who rely solely on the state pension.

“The Chancellor has offered some clarity on the situation, saying that no one who receives the state pension as their only source of income will have to pay income tax on it during this parliament. However, there have been no announcements as to how the government plans to achieve this from an administrative perspective.

“This solution also raises questions of fairness, as those with very small private pension income and those working on a wage similar to the state pension would still be expected to pay their tax bill.

“We called for clarity when this year’s state pension increase was confirmed in the last Budget – and reiterate that call now. The government needs to outline their long-term plans for the possible tax liability that looms for millions of state pensioners, enabling them to feel more confident in their financial situation and plans for the future.”

Chris Beauchamp, Chief Market Analyst at IG: "Today's inflation data from the UK, like that from the US, comes from a different time, before Donald Trump decided to upend the global economy and spur a new wave of inflation. If the conflict isn't resolved quickly, and oil prices keep rising, we may look back at early 2026 as a halcyon period of low price growth. Andrew Bailey will definitely feel wistful about an era when he could look forward to cutting rates rather than thinking about having to increase them."

Prices at the pumps had fallen back, easing the pressure on motorists and giving consumers a bit more to spend. Clothing, footwear, furniture and household goods rose slightly in price.

What a difference a month makes. Even though oil has retreated from the frighteningly high levels hit over the past few weeks, Brent crude is still hanging stubbornly around $100 a barrel, and gas prices remain highly elevated.

Higher energy prices risk being passed on by companies to consumers, and that will be the big worry going forward. Already, core CPI, stripping out volatile energy and food prices, rose slightly from 3.1% to 3.2% in February, indicating that underlying price pressures remain. These are set to intensify, given that energy and freight costs are mounting and firms are likely to want to pass on these extra costs.

President Trump is teasing the world, claiming negotiations are showing significant progress, with a 15-point plan aimed at an initial month-long ceasefire apparently on the table. But conflict is still raging and will be highly complex to solve.

While the key Strait of Hormuz is being opened to ‘non-hostile’ vessels, there will be no safe passage for ships flagged as allies of the US. Right now, given how wide Iran’s circle of enmity appears to be, the Strait will be a highly difficult route to navigate, and production is likely to remain depressed in Gulf states, which are struggling to store crude built up with nowhere to go.”

Sarah Pritchard, deputy chief executive of the FCA, said: “For too long the support people need to make important financial decisions has been out of reach for many.

“A market that provides good quality, lower cost simplified advice alongside comprehensive financial advice and targeted support will better support people making decisions about their financial lives. We want to see more people getting supported, who aren’t currently, and a market that innovates and offers tailored services to meet differing consumer needs.

“We welcome everyone’s views on whether our proposals will achieve our aim of building firms’ confidence to offer a wider range of advice and ultimately to help consumers navigate their financial lives.”

Firms are already able to provide more simplified forms of advice but not many offer it. To encourage innovation and open access, the FCA is proposing to make small changes while maintaining appropriate consumer protections, which it believes can revitalise the sector, including:

Simplifying and consolidating the suitability framework into one set of common rules and expectations.Clarifying existing flexibilities in suitability rules with an expectation that advisers consider ‘sufficient’ information.Rebalancing the role and purpose of suitability communications to support firms making them concise, consumer-focused and proportionate.Changes to give firms greater flexibility in how they design and deliver ongoing advice services. This includes moving from a fixed annual suitability review to periodic reviews based on clients’ needs.

The FCA is starting a discussion about the future of trail commission to modernise the rules and to prevent potential consumer harm.

Qualification standards for advisers will remain unchanged. The FCA is also not proposing to change the adviser charging rules. Advice will still need to be paid via agreed-upon adviser charges rather than provider-paid commission or through cross-subsidisation.

The FCA has already acted to help consumers get more support. From April some financial firms will be allowed to offer targeted support and suggest products to consumers based on what they would recommend to those in similar circumstances.

While targeted support will enable support to be given to groups of consumers, many consumers will need or value individual advice tailored to their specific circumstances.

Other than updating our perimeter guidance, this is the final piece in the FCA’s policy work to make sure that the advice market works for the millions who depend on it for their financial futures.

Bryn Jones, head of fixed income at Rathbones, says: “After several years of rising interest rates, bond markets are offering income levels not seen for over a decade, while risks are more clearly priced. It is a very different backdrop for bonds than investors have seen for a long time, offering relatively rare opportunities. It’s not often you get a chance to invest in positive real income available across of the credit spectrum.”

Richard Cook, senior financial planner at Rathbones, comments: “The inclusion of pensions within IHT from 2027 is prompting a broader rethink around how assets are used over time. It is clear that one area that is coming into sharper focus is the distinction between capital and income, particularly in the context of passing on wealth.

“Where income exceeds day-to-day requirements, it can create flexibility. Rather than relying solely on capital, a natural and regular income stream can support a more gradual approach to transferring wealth, without it being subject to inheritance tax.

“For income-focused investors, particularly those using ISAs and SIPPs, higher yields materially improve the role bonds can play,” Cook adds. “The ability to generate a consistent income stream without eroding capital is increasingly relevant in the current environment.”

Higher starting yields across UK and global bond markets are a key part of that dynamic. Positive real income can now be harnessed across much of the credit spectrum, something that has been largely absent for much of the past ten years.

Bryn Jones continues: “Beyond income generation, fixed income is also being supported by improved risk-return characteristics. Higher starting yields and shorter duration across bond indices mean risk-adjusted returns are more attractive. In addition, bonds continue to play an important role in diversification and managing volatility, particularly in periods of geopolitical uncertainty or when equity markets are pressured.”

Within tax-efficient wrappers, the treatment of income and capital gains can further enhance outcomes over time.

Richard Cook says: “Sheltering income within ISAs and SIPPs, and allowing it to compound, can be powerful over the long term. As the 2027 changes approach, income is becoming a more prominent part of the overall conversation, not just for portfolio construction, but in how wealth may ultimately be used.”

With the end of the tax year approaching, investors who have not yet used their ISA and SIPP allowances may look to secure current income levels and begin compounding sooner.

Celent’s research, based on its comprehensive IT Dimensions survey of more than 1,000 executives at financial institutions, reveals that IT budgets are expected to rise by an average of 7% in 2026 with significant variation across the financial services industry. As a result, institutions across the board are being forced to make tougher decisions about where technology investment will deliver the greatest value.

Tom Scales, Principal Analyst at Celent, comments: “Budgets are rising, but so are expectations. Choosing the wrong technology bets can have real competitive consequences. It is great to see life and annuity insurers investing and catching up.”

Insurance is leading the charge in digital transformation. The biggest expected IT budget rises are expected to surge by 13.8% in life insurance and 12.9% in P&C insurance.

Scales continues: "Insurers are ramping up their IT spend this year, with many moving from experimenting with innovations to full implementation. Celent expects some real operational impact, with advances in generative and agentic AI, automation, real-time data platforms, and real-time risk monitoring. Not to mention that many insurers are modernizing legacy systems."

The lowest expected IT budget increases are seen in the capital markets segments, at only 3.7% on the buy side.

Cubillas Ding, Capital Markets Research Director at Celent, comments: “Buyside firms continue to face pressures from margin compression, and achieving scale remains a defining challenge. The industry is consolidating, but technology and AI enablement remain critical for differentiated strategies that protect profitability, sustain relevance, and deliver tailored investment outcomes. Looking ahead to 2026, Celent expects firms to execute parallel initiatives: operationalize AI while pursuing digital and cloud migrations of core systems.”

Closer to the average budgetary increases lie banks, with corporate banks expected to see a 5.8% budget rise. For these companies, there are three factors at play: the very biggest banks are investing huge sums, the vast majority of spend is mandatory (keeping the lights on or regulatory), and the budget available for innovation and change is falling.

Gareth Lodge, Principal Analyst at Celent, comments: “Corporate banking IT budgets will continue to grow through 2027 but so will the pressures on them. Many banks will feel as though discretionary spending has tightened further. While new technologies create opportunities, they also raise expectations of what these budgets must deliver. Each innovation, such as GenAI, adds not only ongoing operational costs but also continuous upgrade requirements. Furthermore, banks must also balance investing in advanced capabilities for sophisticated clients while maintaining legacy systems relied on by existing ones.”

Opponents are calling it another TACO – Trump Always Chickens Out – trade, supporters hailing another example of the Art of the Deal, but either way equity markets rallied in inverse response to falling oil, with the S&P 500 up 1.15%, the NASDAQ up 1.38%. Intra-day trading saw markets at even higher levels, as the peace talk optimism boosted stocks and bonds. Yields on Treasury bills – US government debt – whipsawed through the day, as market expectations swung from escalation to resolution. Ending the day with 10-year T-bill yielding 4.36%, down from highs of 4.45%. Gilt yields started the week at highs not seen since the global financial crisis – such was the fear induced by the incendiary language over the weekend but similarly fell to end the day down. The 10-year peaked above 5% before falling to 4.86%. UK inflation, due tomorrow, is expected to fall to 2.8% in February from 3% the previous month which could dampen yields further.

Today, Asian markets are continuing the positive momentum seen overnight in the US, with most markets in the green. The Nikkei 500 is up 1.37% in Japan, China indexes in Shanghai and Hong Kong are up 1.5% and 2% a piece. Futures for the UK and Europe are more cautious however, indicating the FTSE 100 will open marginally down and the Euro Stoxx and DAX, reversing their respective rallies of yesterday, look set to open down, too.

In other positive news, a few tankers are trickling through the Hormuz strait, Japan and India have confirmed safe passage of oil and liquified gas shipments. A few ships posts more hope, but is out by some magnitude to the 100 tankers that usually pass through the 21-mile-wide waterway on a daily basis.

Investors should be mindful that one day does not a market make, and that these are whipsaw markets, near impossible to trade with conviction. But this is the most consolatory tone that President Trump has struck since the beginning of the month. As we previously mooted, Trump cannot afford a prolonged war – both from a financial and political point of view. Market levels, approval ratings and Mid-Term election forecasting will all be weighing on the President, and all pointing to conflict resolution. For now, lower oil lowers the market fears of recession. But that is not to say that the only way is up from here, investors should expect further volatility. Iran is a more complex negotiating partner than a few weeks ago – fractured and emboldened and won’t capitulate without compromise. We advocate taking a long-term view, enabled by diversified portfolios, with laser focus on your financial goals.”

The Trustees of the Scheme selected M&G due to its strong financial position and administration capabilities. The Trustees also welcomed M&G’s commitment to working in partnership to ensure excellent member experience was maintained following the buy-in.

LCP acted as the lead transaction adviser for the Plan, as well as Scheme Actuary and investment adviser. Gowling WLG provided legal advice to the Trustees on the contractual terms and Squire Paton Boggs provided legal advice to the Trustees on the benefits being insured. The deal is M&G’s first transaction using LCP’s streamlined buy-in service, which simplifies the buy-in process for smaller schemes through pre-negotiated contracts with enhanced terms, making transactions faster and more cost effective.

M&G is a founding member of the BPA market and has a strong track record in pension risk transfer, backed by a robust balance sheet and commitment to customers. Looking ahead, M&G continues to strengthen its position through product innovation to support long term growth in the market and achieve its ambition of £3-£4 billion per year in BPA transactions by 2027.

Rosie Fantom, Head of Bulk Annuity Origination & Execution at M&G, said: “We’re pleased to have worked with the Trustees of the Panasonic UK Pension Plan to deliver a solution tailored to the Plan’s needs, securing the benefits of around 650 scheme members. The transaction benefitted from having pre-agreed terms in place under LCP’s streamlined buy-in service which allowed us to execute the transaction in just over three weeks after agreeing exclusivity. Our ability to execute transactions quickly and effectively reflects M&G’s strength and expertise in the market and we will continue building on this to support trustees in managing pension risk and deliver certainty for members.”

Lisa Mundy, Professional Trustee, BESTrustees, said: “We are absolutely delighted to have completed this deal with M&G, where the Trustee's number one priority was to secure the long-term pension benefits of our members. With the strong support of Panasonic and the guidance of LCP we are pleased to say that we have achieved just that.”

Peter Rawson, Partner, LCP, said: “We are delighted to have supported the Trustees in securing a full buy-in with M&G. This was the third buy-in completed by the Trustees using LCP’s streamlined buy-in service, and the first with M&G. This transaction demonstrates that, when a scheme is well-prepared and there is strong collaboration with the sponsor, trustees can act quickly to take advantage of market opportunities. Through the LCP streamlined buy-in service, the Trustees were able to run an expedited process securing strong terms, whilst still undertaking a thorough selection and due diligence process.”

The largest providers in the industry are currently coalescing around two broad new retirement solutions to meet these requirements – Flex & Fix (F&F), which encompasses a range of different solutions that combine drawdown and the purchase of an annuity in different ways, and a post-retirement only version of Collective Defined Contribution, typically referred to as Retirement CDC or R-CDC. Both aim to provide sustainable retirement income with longevity protection, so that members don't run out of money in retirement, but they achieve this in different ways.

While these represent the two broad approaches, as providers develop their offerings, a spectrum of designs is emerging within each. Some are simple, easy to explain models, and other more sophisticated structures seeking to mitigate specific risks.

Using the key features noted above, and our views of appropriate investment strategies for each, we have undertaken modelling to compare possible member outcomes from the two approaches. Our more in depth report: A new era for UK DC retirement solutions sets out detailed results and explanation of the assumptions used in the modelling.

Before turning to the modelling results, it is helpful to be clear about how to interpret them. The differences between F&F and R-CDC are driven by underlying design choices. In particular, how long growth assets remain invested and how much ongoing decision-making is required from members in retirement. The results below should therefore be read as illustrating the consequences of these design choices.

The higher lifetime (and initial) R-CDC income is mainly due to the expected investment strategy. Return-seeking assets are able to be held for longer than in F&F, as there is no expectation of annuitising. Longevity pooling is also a contributor to higher incomes in R-CDC.

A secondary reason F&F income is more volatile comes from 'conversion risk' at the point of annuitisation; when the member's income is locked to whatever annuity rate is available at that time. A sudden shift in market conditions or longevity pricing can cause a sharp adjustment in income at annuity purchase. Some of this risk can be managed (through de-risking prior to the annuity purchase, or staggering annuity purchases over time). However this will not mitigate the risk fully and also reduces the allocation to growth assets, so would be expected to reduce the design's cumulative lifetime income.

Ongoing decision making: Flexibility in F&F approaches comes with an ongoing decision burden, whereas R-CDC removes ongoing decision risk:

In F&F, members must decide how much to withdraw, whether and when to adjust withdrawals, and when to annuitise. While tools and guidance can support these decisions, there is a risk that members make choices that lead to unsustainable income or poor outcomes, particularly if engagement falls over time

In R-CDC income is managed collectively by the scheme, providing a more hands-off experience that may better suit members who do not wish to actively manage their retirement finances

Reversibility: If members wish to change their retirement option in the early years, F&F has more ability to reverse out of than R-CDC:

F&F tends to keep the member's pot in drawdown during the early years of retirement. This means they can access their savings and choose to move elsewhere, until an annuity is eventually purchased

With R-CDC, some or all of the member's pot is used to purchase a collective pension that pays an income for life. In return for this simplicity and longevity pooling, flexibility is limited: members are generally unable to exit the arrangement, beyond any agreed cooling-off period or potential surrender value terms

Balancing outcomes: The choice between simplicity and flexibility is not necessarily all-or-nothing:

F&F, by nature, can let members decide some of the balance between certainty and flexibility

R-CDC designs don't need to use all of the member's pot to purchase a collective pension; the remainder can be kept in drawdown or other arrangements to provide flexibility, access to capital, or death benefits. This can help members balance the benefits of pooling and simplicity with a desire for optionality

Under an R-CDC approach, the ability to leave an inheritance lump sum is more limited. However, R-CDC is likely to include spouse's pensions and/or guarantee periods as the mechanism for death benefit.

F&F relies on continued engagement and effective decision-making over time

R-CDC prioritises simplicity and income stability by managing investment and longevity risks collectively

For trustees, the choice is therefore less about selecting the 'best' solution, and more about deciding how much complexity should sit with members versus the scheme. In practice, the effectiveness of a default may be judged on how well it performs if and when members disengage.

A GlobalData poll conducted across Verdict Media sites in Q3 and Q4 2025 found that insurance insiders believed cyber insurance would see the highest demand due to geopolitical tensions. But one in four respondents believed that political risk insurance would. Supply chain insurance is also likely to be popular now with heavy restrictions in major shipping routes.

Ben Carey-Evans, Senior Insurance Analyst at GlobalData, comments: “Political risk insurance is important to businesses near potentially dangerous zones, as most insurance policies have war exclusions. This means that if a hotel, for example, is damaged by any kind of military strike, a traditional commercial property or business interruption policy may not pay out. There may also be legal grounds to dispute the terms of that particular contract. The risk of damage caused by intercepted missiles or accidental strikes is extremely high in areas such as the UAE and Qatar at present.”

As the conflict continues, major tourist hubs such as Dubai and Abu Dhabi face heightened exposure. The likelihood of high-value property damage is significant, which is likely to drive further demand for political risk insurance.

Carey-Evans concludes: “It is clear that insurers looking to sell political risk insurance (or cyber, or supply chain insurance) will see a huge spike in business throughout 2026. However, they will be taking on significant risk in doing so, so pricing the product and understanding the level of risk they are exposing themselves will be critical.”

On the domestic front, Wednesday’s UK CPI inflation reading for February will be a key data point for rate setters and markets. The numbers predate the recent oil shock and forecasts, but comments by the Bank of England suggest that continued high services inflation is likely to keep the number close to January’s 3.0% read out. Easier comparisons and the fiscal tightening seen in the 2025 Budget had been expected to see second quarter CPI inflation fall towards 2.1%, but higher fuel prices are now expected to see the average of the next three months stay at around 3%. That’s seen discretionary sectors underperform so far in 2026, partially offset by stronger performances in Oil & Gas, Electricity and Aerospace and Defence.

US stock futures are also down, taking a lead from the Asian and European exchanges. In a reversal of trends of recent years, US markets have underperformed global indices so far this year, with value strategies holding up better than growth.

Although the S&P 500 is down around 5% year-to-date, there have been some pockets of strength, with the Oil & Gas and energy sectors unsurprisingly being the standout. Sticking with commodities, Basic Materials are in positive territory with defensive sectors such as Telecoms, Consumer Staples and Utilities also firmly in the green. Semiconductors stocks have also made gains so far this year. This typically cyclical sector is benefiting from the once in a generation pivot towards artificial intelligence. More broadly, cash-rich, cash-generative big technology companies look well placed to ride out economic challenges.

Brent Crude is currently trading at $113 per barrel but has bounced between $104 and $118 over the last 24 hours as traders continue to grapple with the standstill of shipping in the Strait of Hormuz, which typically transports 20 million oil equivalent barrels of hydrocarbons each day. The International Energy Agency is considering the release of further emergency reserves, but the effectiveness of this temporary measure is limited, with a swift end to hostilities in the Gulf remaining key to restoring stability. US crude inventories are one to watch after a surprise build last week, illustrating strength in America’s domestic energy supplies.

The pattern feels familiar enough to repeat. Yet, this time is different, at least for the US, with a more complex and contested monetary policy outlook in other developed markets.

In 2022, unemployment was falling, post-Covid fiscal stimulus was extensive and financial conditions were loosening. Today, each of those variables has reversed, changing the case for how central banks should, and likely will, respond.

Last week’s decisions by the Federal Reserve, the European Central Bank (ECB), the Bank of England (BoE) and the Bank of Canada (BoC) to hold rates steady reflects this tension. The uniform action and hawkish tone across all four central banks might suggest alignment, but beneath the surface, a more nuanced and growing divergence among them is taking shape.

Elevated oil prices present more of a growth than an inflation risk to the US and that with the macro backdrop so fundamentally different from four years ago, the basis for an easing bias remains firmly in play.

The meeting concluded with a hawkish tone across the economic projections and press conference, with interest rates shifting up across the curve as the market priced out the possibility of a Fed cut this year. Average market pricing has shifted from more than two cuts before the conflict to pricing a slight probability of a hike in 2026.

While we are conscious of the inflationary impact of the conflict, we see the repricing as an overcorrection. Our base case is that the Federal Open Market Committee remains in an easing cycle and will deliver an additional two to four rate cuts, taking policy rates to 2.75 – 3.25%, on the back of a weakening labour market and a more dovish Kevin Warsh-led committee.

Supporting this is the US has just printed a negative payroll number, with unemployment trending toward 4.8% and breakevens moving only around 10 basis points – a quiet but clear signal that the bond market is not pricing a wage-price spiral. The tail risk runs in one direction only: labour market weakness is likely to become more pronounced as the year progresses, potentially accelerating easing beyond the base case.

The ECB’s inflation mandate is explicit and hard-won, and a visible commodity shock creates real internal tension. Its economies carry less labor market slack than the US, meaning the growth-inflation trade-off is less clear-cut. The BoE is navigating a consumer sector more directly exposed to energy costs alongside a labor market showing its own signs of fatigue, a combination that makes the case for holding complicated, and the case for hiking uncomfortable. Neither central bank has the same analytical cover the Fed does.

The BoC sits closer to the Fed end of the spectrum, with inflation at 1.8% and unemployment at 6.7% leaving limited justification for tightening into an energy-driven growth shock.

This divergence is not merely a central bank communications problem, it is also an investment signal. And unlike 2022, when credit markets were largely insulated from the shock that drove monetary policy, today’s credit cycle has its own fault lines: AI disruption, business development company loan books under pressure, software capital structures being repriced, a redemption cycle in semi-liquid vehicles gathering pace.

Importantly, that combination of monetary policy divergence and independent credit stress is generating opportunities across both rates and credit that did not exist three months ago.

Within credit, the preferred positioning is quality-oriented: BB US and European high yield, shorter duration, less cyclical and the mezzanine CLO market where dislocation is generating attractive entry points. Bonds of large-cap financials, with their high regulatory barriers and structural moats, have provided ballast throughout. Selectively, emerging market credit and certain technology names that have sold off sharply are now better priced from a bond perspective than at any point this year.

The most attractive entry points in both rates and credit exist precisely because the consensus has yet to fully reprice this cycle for what it is. This cycle will not repeat 2022. The cost of assuming otherwise is already accumulating.

Worries that interest rates may have to be increased sharply to contain a new price spiral have sent the cost of financing UK government debt sharply higher. This makes the latest snapshot of the public finances uncomfortable reading. Borrowing came in at £14.3 billion in February, £2.2 billion more than last year, marking the second-highest level for the month since records began. This was partly due to the timing of debt interest payments and demonstrates how onerous the borrowing burden already is for the government, just as it faces even higher costs to refinance its debt.

Although the Chancellor, Rachel Reeves has previously said there is room for some financial support to help alleviate high energy costs for businesses and consumers, she is highly constrained. The longer the conflict continues, the less fiscal firepower the government will have to provide meaningful stimulus to an economy that was already stagnating before the conflict escalated.

Crude prices may have fallen back slightly but remain highly volatile. They have dropped from the worrying highs reached yesterday but remain well above $100 per barrel, with Brent crude currently trading at around $108 a barrel. Gas futures have also retreated but remain more than 10% higher than before attacks intensified on energy facilities in the Middle East this week.

Traders are still assessing the cost of the damage inflicted on Qatar's Ras Laffan complex, which is responsible for around a fifth of global LNG supplies. The damage could take years to repair, which is why these sharply higher prices may persist. There have been efforts to calm markets, with Israel vowing not to resume attacks on Iran’s energy infrastructure. There have also been claims of significant progress, with Benjamin Netanyahu stating the conflict could end ‘a lot faster than people think’.

However, the US administration is clearly rattled by rising energy prices, particularly if elevated gasoline costs become entrenched and hurt Republican electoral prospects. Treasury Secretary Scott Bessent has suggested that sanctions on Iranian oil could potentially be lifted. This appears to be a desperate measure to contain prices, given that US forces are still engaged militarily against Iran. Similar relief has already been granted to Russia via a one-month waiver allowing its oil on tankers at sea to be purchased.

Lifting sanctions may provide only limited relief to elevated prices but could enable these regimes to continue funding their war efforts.”

Brent crude remains highly volatile but has traded as high as $114 a barrel today, threatening to climb back towards recent scorching levels. Gas prices have surged by 25%, reaching a range not seen since early January 2023.

Warnings that oil could reach $150 a barrel have resurfaced. Israel’s attack on Iran’s gas fields has prompted retaliatory strikes on facilities in Qatar. Europe in particular is reliant on LNG exports from Qatar, as countries have been weaning themselves off dependence on Russia. The conflict is not only highly damaging for economies in the region, with tourism and business activity hit, but the knock-on effects of higher energy prices will have toxic repercussions worldwide.

The Bank of England’s Monetary Policy Committee is meeting against this turbulent backdrop, and it looks almost certain to keep interest rates on hold given the inflationary risks posed by the conflict. Not only is the headline CPI rate likely to rise due to higher fuel and energy bills, but there will also be concern that companies will pass on escalating costs through higher prices across a range of goods and services.

Food prices, which had been easing, risk rising again as freight costs increase and fertiliser exports from the Middle East are disrupted. There are also concerns about helium supplies being stranded, a key component in semiconductor manufacturing, which could lead to delays in producing electronic goods and even cars. Traders are now placing more bets on the Bank being forced to raise interest rates by the end of the year, a sharp reversal in policy - just as borrowers had been hoping for relief.

The mood among central bankers is understandably sombre. The Federal Reserve, as expected, kept interest rates on hold, and Chair Jerome Powell warned of fresh inflationary pressures entering an already complex environment. The European Central Bank, Sweden’s Riksbank, and the Swiss National Bank are also set to announce their policy decisions today. Caution is likely to dominate, with investors expecting a particularly hawkish tone from the ECB. While a hold is anticipated for now, further rate increases are increasingly expected later this year as inflation expectations shift.

The spectre of stagflation is hovering, with the combination of rising prices and stagnating growth posing a real threat. High energy costs are set to dampen consumer spending and curb business investment as both grapple with elevated bills and ongoing uncertainty.”

The aim is to cut unnecessary administration, reduce flat fee charges on multiple small pots and improve member engagement. The Department for Work and Pensions (DWP) estimates that automatic consolidation could boost outcomes by around £1,000 for the average saver. However, these consolidators aren’t expected to be fully up and running until 2030.

These risks widen the gap between well supported savers and those disengaged from their pensions. Fragmented savings make it harder to build a meaningful retirement income. Smaller pots often attract proportionally higher charges and may be left in underperforming funds. All of this can contribute to the growing pensions adequacy crisis that many are facing. In turn, this could impact employers if their staff are unable to afford to retire when they plan to.

Consolidation offers clear advantages, but without proactive support the benefits will be uneven.

Employers do not need to wait for legislative deadlines to act. By helping employees understand the value of bringing their pensions together, employers can support better retirement outcomes for their staff at relatively minimal costs and reduce the long-term risks that members face from holding fragmented savings.

If you’d like to talk about how we can support your employees with clearer, more effective pension choices, please get in touch.

This article was first published by REBA.

David Rees, Head of Global Economics, Schroders said: "The Bank shelved its planned rate cut at today’s meeting as surging energy prices threaten to reignite inflation. Much will now depend on how high energy prices go, and for how long they remain elevated. But the current levels of oil and gas prices are already enough to add around 1% to headline inflation in the coming months, while shortages of fertilisers could push food inflation higher later in the year. A relatively brief spike in commodity prices could still allow inflation to subside by the summer and bring rate cuts back onto the agenda later this year. However, with events in the Middle East seeming to get worse, there is a clear risk an extended price shock will keep inflation above target for the foreseeable future, squeeze real incomes, and push the economy into stagflation. That would block further rate cuts and could even bring hikes back into play if wage growth accelerates again."

Adam Gillespie, Partner at XPS Group: Today's announcement will only have a minimal impact on Defined Benefit (DB) pension schemes because funding positions are driven primarily by long-term gilt yields rather than the Bank Rate itself. In reality, long-term UK interest rate and inflation expectations have already shifted materially higher this month. The gilt market has not been waiting for Threadneedle Street. Most schemes are well insulated from today’s decision with aggregate DB surpluses still well above £200bn - a wall of financial resilience built up over several years of elevated yields. In this high funding, high-rate environment, there are two clear priorities for trustees and sponsors right now. In the short term, without regular recalibration, schemes risk their liability hedges slipping out of alignment and their hard-earned financial buffers being eroded. As well as recent upticks in rates and inflation, structural shifts in the gilt market are creating headwinds for schemes' protection strategies. Further gilt market volatility is to be expected with demand falling from the gilt market's most reliable customer, and the United Kingdom Debt Management Office changing supply. Today is another reminder for trustees and sponsors to keep their hedging strategies under active review and consider ways to strengthen their resilience to an uncertain future. In the longer term, trustee and sponsor focus should be on making the most of healthy surplus positions. With the Pension Schemes Bill progressing through Parliament and surplus access regulations expected later this year, the current financial environment offers real opportunities to benefit members, trustees and sponsors.

Mike Ambery, Retirement Savings Director at Standard Life plc said: “Today’s decision to hold interest rates at 3.75% reflects the Bank of England’s caution in the face of growing global uncertainty. With conflict in the Middle East driving a sharp rise in oil prices, the key question now is how far this feeds through into energy bills and wider inflation. Against this backdrop, a pause is unsurprising. Only weeks ago, markets were increasingly confident that inflation was on a downward path and that further rate cuts could follow. However, the escalation of tensions involving Iran has clouded that outlook, raising the risk that inflation proves more persistent. As higher wholesale costs filter through to households, the Bank is likely to remain measured and gradual in its approach when cuts do begin. For savers, a higher-for-longer rate environment can offer some support - particularly for those holding cash. However, with inflation risks building, there is a real danger that the value of those savings is eroded in real terms over time. Those saving for the long term should consider tax-efficient options such as pensions and Stocks and Shares ISAs to help their money keep pace with rising prices. For borrowers, this decision signals that pressure on household finances may persist. Those on variable or tracker mortgages - or nearing the end of a fixed-rate deal - could face elevated borrowing costs for longer, making it essential to review options early and plan ahead.”

Chris Arcari, Head of Capital Markets, Hymans Robertson said: “The escalation in the Middle East and its impact on oil and gas supplies have driven a sharp repricing in markets. Having previously expected two 25-basis-point rate cuts in 2026, investors are now entertaining the possibility of rate hikes. But while higher energy prices are likely to push inflation back above 3% in the second half of 2026, central banks typically look through supply-side shocks. These tend to be temporary, are largely outside the reach of monetary policy and usually weigh on growth. That said, given the post-2022 experience – when an energy shock led to a prolonged inflation surge – the Bank of England (BoE) will be alert to the risk of second-round effects and a de-anchoring of inflation expectations. Today’s conditions differ materially from 2022. Growth is weaker, labour markets are loosening and inflation was already trending lower before the conflict. Interest rates and yields are also significantly higher and mildly restrictive. Nonetheless, recent developments could delay the BoE’s response as it assesses the impact of higher energy prices on both growth and inflation – highlighting the challenging trade-off between downside growth risks and upside inflation risks. A shift to rate hikes, as markets are now pricing in, looks unlikely in the near term. The Monetary Policy Committee was inclined to cut rates to support activity before the shock, and tightening policy into a weakening labour market – with unemployment at a four-year high of 5.2% and vacancies falling – risks inflation undershooting after the shock fades. Therefore, any move towards hikes would require clear evidence of second-round effects and further deterioration in inflation expectations.”

Michael Hird, Chief Operating Officer at WKW, has been closely observing the unfolding situation. He, alongside WKW’s team of experts, are already positioned to respond to the impacts the conflict will have on the marine market.

“Expect delays to cargo both in transit and awaiting shipment as vessel owners alter trade routes to avoid high-risk areas. We’re likely to see additional freight charges and vessels invoking the right to deviate or deploying force majeure clauses,” said Hird. “This means increased costs for cargo movers and the potential for shipments landing at unintended ports with cargo then needing to be on-carried to final destinations.”

“We will see more frequent losses for time sensitive cargoes, production downtime, breakdowns in supply contracts, and stock accumulation or shortages.”

War risk insurances have been subject to widespread cancellations and carriers are reevaluating their willingness to accept transits through conflict affected regions with elevated crew safety risks. Though war risk insurance remains accessible, particularly in the London market, adjustments to terms and dramatic increases to rates have reduced or eliminated voyage margins.

In a high-risk, high-cost business environment, effective claims management becomes especially vital, says WKW CEO Anthony Smith.

“We are prepared for challenges in deploying surveyors or other experts to certain claims locations or emergency situations. Our global network of local agents ensures that we can respond to and investigate claims thoroughly as they arise,” said Smith.

“Whilst hostilities continue to escalate, we will continue to see impacts widening and losses increasing. WKW will continue to meet the needs of insureds – providing access to immediate, high-quality claims service.”

The oil price has softened – though brent still trades above $100 – thanks to two pieces of news; a select few tankers are moving through the key Strait of Hormuz and Iraq has agreed a pipeline deal to export oil via Turkey. A reminder that in normalised trade, 20% of daily oil and 25% of liquified gas flows through Hormuz; this activity is a fraction of that. But it does mark an improvement on last week, where the Strait was effectively shut. Iran is reportedly allowing only those tankers operated by countries considered neutral, or anti-US in this conflict, such as China.

While any relief rally is welcome, investors should be mindful that volatility is likely to continue over the next month, through extreme daily moves become less likely as markets look to longer-term indicators. Policy – both monetary and foreign – is key. Oil futures remain elevated compared to pre-conflict, with 6-month prices near $80. This is a key indicator of remaining risk to economic growth and consumer confidence.

Economic news is the order of the day across the Pond as the we get both an inflation print and the US Federal Reserve’s Federal Open Market Committee concludes its March meeting. They may be meeting stateside, but whatever the Fed says today will have global implications.

The US Producer Price Index inflation report for February will be released today, but will not reflect elevated oil prices, so is expected to show month on month increase of 0.3%, in line with longer term trends. Data for the month of March will be more revealing, including recent oil and gas shocks.

An hour after the inflation print we’ll hear from the Fed, who we expect to hold rates today, as does the broader market, so the news is unlikely to move prices. What does have the potential for upset is what Chair Jerome Powell says at his penultimate press conference – how the vote was split and any commentary on the war, forward guidance implications. The markets have flipped from expecting two cuts this year pre-Iran conflict, to one hike after the escalations, to now one cut is the consensus view, later in the year.

The Fed will also share its Outlook-at-Risk report, published monthly, which gives details of risks to unemployment, inflation and economic growth. Expect oil prices to dominate.”

Matt Britzman, senior equity analyst, Hargreaves Lansdown: “Since Jensen’s keynote, we’ve had a couple of big confirmations – firstly, that NVIDIA’s eye-catching $1trn guide is based purely on Blackwell and Rubin GPUs, meaning it doesn’t include contributions from its other chips, rack-scale systems, or even the Rubin Ultra GPU slated for next year. Secondly, production of the China-focused H200 chip has now ramped after securing agreements from both US and Chinese authorities, alongside a new AI inference chip built through its partnership with Groq. Crucially, pretty much no one has China baked into forecasts right now, so this could be a material incremental driver, depending on how much NVIDIA is ultimately allowed to ship.”

Analysis of average transfer-in times from 35 major pension providers and administrators across the UK to PensionBee for 2025, found that while the fastest completed transfers took just five days, the slowest - including Cushon Master Trust and Creative Pension Trust (recently acquired by WTW from NatWest), XPS Administration, LGPS and Capita - took between 47 and 90 days, leaving retirement savers routinely waiting months just to move their own money.

The overall industry average transfer time remained broadly unchanged at 23 days in 2025 as compared to 21 days in 2024. This was largely driven by the top 20 providers or administrators either improving or holding steady their transfer times, demonstrating that efficient pension transfers are achievable at scale when providers prioritise customer experience and embrace digital processes.

Notably, these transfers are either from providers that are mostly regulated by The Pensions Regulator (TPR) rather than the Financial Conduct Authority (FCA), or are handled by third-party administrators who are not caught by either regulator; and they do not use electronic transfer platforms (such as Origo), or voluntarily publish their transfer times.

The result a bifurcated market: at one end, providers embracing technology and digital processes that are regulated by the FCA and thus must abide by the Consumer Duty, becoming more efficient and achieving faster transfer times; and at the other, those regulated by TPR (or not at all) still taking months to move savers’ money and languishing behind.

This is why PensionBee is publishing its data - to shine a light on the issue of pension transfers and the firms that are all too easily able to hide from plain sight.

Lisa Picardo, Chief Business Officer UK at PensionBee, said: “Building on the momentum of our ongoing Pension Switch Guarantee campaign, we’re now publishing our 2025 pension transfer data, to shine a light on the true spectrum of consumer experience when it comes to moving their hard-earned retirement savings.

“Whilst we're encouraged to see more firms embracing digital and delivering real improvements, the progress is mixed. The providers languishing at the bottom of the table may be failing to invest and modernise, adopting ‘sludge practices’ that serve as a blocker for consumers seeking to engage, or a combination of both. Regardless, leaving savers' pensions stuck and out of sight for months on end is simply not acceptable.

“With Pensions Dashboards set to connect millions of people to their retirement savings for the first time, we're approaching a once-in-a-generation moment for increased engagement and the improvement of retirement outcomes. But discovery is only half the story - savers need to be able to act on what they find and take control of their money.

“PensionBee, and other leading personal pension providers, are calling on the Government to fix the issue once and for all, with measures including an update of the six-month statutory transfer deadline to 30 working days - keeping pace with modern consumer expectations and the rest of the financial services ecosystem. The 2021 Transfer Regulations also need a revamp to end unnecessary ‘amber flagging’ of perfectly legitimate transfers, and refocus industry resources on real scam prevention.

“Ultimately, this is savers' money, and their experience of transferring their pensions should not depend on a lottery of which ceding provider or administrator manages their pot. The processes, infrastructure and technology already exist to support smooth and efficient transfers - but the legislation now needs to work harder to give firms that are failing to respect consumer rights the impetus they need to finally raise their game.”

AutoRek’s 2026 Insurance Report, based on 250 interviews with insurance and healthcare insurance managers across the UK and U.S., points to a growing performance gap between firms modernizing their back offices and those still running on fragmented systems and manual workflows.

“Insurers know where the industry is heading. The challenge is that most haven’t translated that awareness into operational change. Settlement cycles are lengthening, data environments are getting more complex, and the firms that have already embedded automation into their financial operations are pulling ahead. The longer firms wait to modernize, the harder it becomes to close that gap,” said Tony Shek, Insurance Sector Lead at AutoRek.

AI adoption, meanwhile, remains deeply uneven across the sector. 6% of firms report no AI usage at all, and the barriers to progress are well documented. Legacy system integration challenges (42%), fragmented data environments (39%) and a shortage of in-house AI expertise (40%) are holding firms back. Over half describe their data governance frameworks as early-stage or developing, raising questions about how effectively AI can be deployed at scale.

The findings suggest that the industry recognizes the need to act. Half of firms are now prioritizing AI and machine learning, 42% are focusing on automation of back- and middle-office functions, and 51% say regulatory requirements are driving their modernization decisions.

While not specifically mentioned in the 2025 Pensions Commission announcements, means testing of the State Pension is likely to be one of the areas the Commission considers.

Reasons for introducing means testing: building a “fairer” system

Longevity risk is a topic I always find interesting, and the State Pension is arguably one of the largest fixed-income retirement arrangements in the world.

Analysis from the Institute for Fiscal Studies shows that, for the lowest fifth of pensioners, the State Pension makes up around 70% of total retirement income. These pensioners are therefore only slightly above Pensions UK’s minimum retirement standard of £13,400 a year. Many are likely to fall below that level if they rely solely on the State Pension.

By contrast, for the top fifth of earners, the State Pension accounts for around 20% of total retirement income.

Redistributing State Pension support from the highest to the lowest earners could therefore improve retirement outcomes for millions of lower-income pensioners.

My own analysis suggests that, if life expectancy rises by more than expected, the State Pension Age could, in an extreme scenario, need to increase to 80.

Means testing would therefore give the government another lever to help manage the cost of the State Pension.

One possibility is to view it as a form of longevity risk insurance, rather than as a uniform level of income.

The state is well placed to help manage longevity risk across the population. It could help pensioners manage the long-term risk of running out of money if they live longer than expected.

The system could include means-tested, age-based increases that activate for older pensioners.

Such a system might help encourage individuals to save more for retirement. It could also create greater scope for retirement products that pay more at younger ages, when pensioners are in the spending phase of retirement.

Reasons against introducing means testing

Jack raises some interesting points, particularly from an actuarial perspective on the State Pension system as a whole. I want to look at some of the reasons why means testing may not be the right approach, drawing on my background in individual retirement planning and focusing on how it could affect retirement outcomes.

The UK is already facing a significant retirement savings challenge, with many people either under-saving or not saving at all. Analysis from the Department for Work and Pensions suggests that:

Only 25% of individuals earning less than £10,000 per year are saving into a pension.75% of individuals earning between £10,000 and £20,000 a year are, at most, saving at the minimum auto-enrolment contributions level of 8% of salary.

Retaining a uniform State Pension reduces the risk of lower-income savers being discouraged from saving into a pension.

Analysis from the Institute for Fiscal Studies suggesting that, since 2011, the triple lock has added £11bn a year to the cost of the State Pension.Analysis from the Office for Budget Responsibility suggesting that the triple lock could add £43bn a year to the cost of the State Pension in the early 2070s.

These are significant costs for taxpayers. A fair question is whether some of that spending could instead be used to increase the base level of State Pension income.

Several suggestions have been made about how the triple lock could change. However, any reform would be politically controversial, and the main political parties have tended to treat the triple lock as close to untouchable.

There is also a risk that added complexity could discourage people from claiming other means-tested benefits. In the UK, it is estimated that around 38% of eligible pensioners do not claim Pension Credit, possibly because of the complexity involved in claiming it.

Public and political opposition to something as fundamental as means testing would be substantial. It would take a very bold politician to propose a policy that may deliver no savings for five to ten years, yet prove immediately unpopular with the electorate.

So, should the State Pension be means tested?

As Jack and James have highlighted, any move towards means testing would have implications well beyond the State Pension itself, touching everything from retirement saving behaviour to perceptions of entitlement and fairness in society.

Trade-offs are unavoidable, and the 'right' answer depends on priorities as much as economics. The complexity of the issue, combined with the public sensitivity around pensions, makes this one of the most politically difficult debates in UK retirement policy.

Tehran has launched intense attacks on the American embassy in Iraq and is continuing to strike key infrastructure sites of US allies across the Middle East. Iran is intent on causing as much disruption and damage to facilities as possible to stop the flow of oil, with energy its key weapon in this conflict.

The optimism which mounted on Monday is fizzling out. Crude prices are rising again, and London’s FTSE 100 has had a flat start to trading, with energy giants offering some support but other losses, such as falls in airline stocks, offsetting gains. Investors are assessing the impact of a longer, drawn-out conflict on economies around the world. European indices are expected to be in the red in early trade, and more pessimism is set to spread on Wall Street.

The airline industry is still reeling from the repercussions of intense strikes across the Middle East. As drones continue to infiltrate the skies, it has caused a sharp reassessment of flight maps. The closure of UAE airspace overnight due to a drone attack on a fuel storage tank has dashed hopes of more permanent routes being re-established.

The tense situation, with travel warnings staying in place and demand for holidays plummeting, has prompted British Airways to cancel all flights to Dubai until at least June. Abu Dhabi flights remain cancelled until October, while routes have also been cancelled to Bahrain, Tel Aviv and Amman. Airlines are counting the high cost of cancellations, rerouting flights, and dented consumer confidence, while aviation fuel has shot up in price and is set to stay highly volatile.

While many airlines have oil hedging in place, securing a chunk of their fuel at fixed prices, it’s not a failsafe solution, particularly if the war drags on much longer. Competition for other, safer destinations is also set to increase as holidaymakers rethink plans, which is likely to see ticket prices continue to rise.

The disruption of transport routes will cause huge headaches for conference organisers and hotel chains across the region. The UAE has been trying to project an image of business as usual despite the attacks, but with airlines cancelling routes, the viability of big events has come under serious question, and postponements are set to mount up. Kingdoms in the Gulf were counting on tourism and being hubs for global business to help diversify their economies, and this conflict is proving to be a major setback for those plans. London-listed Informa has seen shares continue to decline in early trading, as investors assess the impact on the global events organiser's operations, particularly in the Middle East.

While there appear to be back channels of communication which have opened up between Iran and nations like India, Pakistan and China, enabling safer passage for their tankers, the key Strait of Hormuz still largely out of bounds. Efforts by Trump to round up support from NATO members to increase security through the waterway have been met with considerable pushback. Finland’s President, Alexander Stubb, has backed Keir Starmer after the UK Prime Minister was once again singled out by Trump for criticism for not acquiescing to US demands to support its military campaign. Finland and Germany’s leaders have stressed that it’s not a NATO war, with the Finnish President emphasising that peace mediation, not escalation, should be the priority.”

Key Highlights
-- The Reinsurers reported a record aggregate net income of $25.2 billion in 2025 because of strong underwriting results and solid investment income, despite the brutal start to 2025 with large losses from California wildfires.

-- Property catastrophe pricing is leading the softening of the global reinsurance market in 2026 with capacity oversupply while certain specialty lines may see greater volatility from global geopolitical tensions.

-- Investment income remained a major earnings driver in 2025, supported by larger asset bases, strong portfolio yields, and market gains on investments, but this tailwind is set to narrow in 2026 as reinvestment yields fall.

“With narrower underwriting margins expected across many reinsurance business lines in 2026, appropriate risk selection and disciplined underwriting will become decisive differentiators for the Reinsurers' 2026 performance,” said Steve Liu, Assistant Vice President, Global Insurance & Pension Ratings. “The current Middle East conflict is likely to produce only temporary and localized price spikes in certain specialty reinsurance lines unless the loss patterns are significantly reshaped in 2026, discouraging capital deployment.”

Global Property and Casualty Reinsurers 2025-26: From Peak Returns to Geopolitical Headwinds

The Pensions Regulator’s 2025 DC landscape report published today (Tuesday 17 March 2026), shows the number of DC schemes has decreased by 15% to 790 in 2025 - consistent with 2024’s decline when the number of schemes fell below 1,000 for the first time. The decrease in the number of schemes is primarily driven by those with fewer than 5,000 memberships exiting the market.

At the same time, assets have continued to grow - from £205 billion in 2024 to £249 billion in 2025 – an increase of 22%, while memberships are up by 7% on last year.

Master trusts account for the majority of DC members, holding 30.1 million memberships (92%) and £208 billion in assets (83%).

Richard Knox, TPR’s Executive Director, Strategy, Policy and Analysis, said: “People rightly expect to receive value from their hard-earned retirement savings. As we move towards a market of fewer larger schemes, master trusts now dominate. We believe that larger schemes are better placed to deliver value for money, including stronger investment returns and better service.

“The current Pension Schemes Bill will speed up market dynamics. In the new pensions world, we urge pension trustees of smaller schemes, in particular, to review their scheme today. Those that cannot match the stronger performers should consolidate out of the market and transfer savers to a better value scheme.”

We’re delivering change at speed by acting now within our current powers, with a focus on improving how the system works in practice. This includes a new registration stage for complaints, updated dismissal grounds and clearer guidance on the fair and reasonable test.

Throughout, our aim has been to improve alignment, predictability and early engagement across the system – while maintaining strong and effective consumer protection.

Strong consumer protection is not just about rights on paper, but about how well the system delivers for people when they need it most. A system that enables earlier identification of harm, better coordination and clearer expectations should help reduce unnecessary delay and uncertainty for consumers, and support more consistent outcomes.

Consumer stakeholders told us that harm can grow quickly when issues affecting many customers are not spotted early enough. In response, we’ve changed how we assess potential harm in the round. This includes also considering the number and makeup of firms across a market or multiple markets that are affected, rather than relying solely on the number of consumers impacted. This will further support earlier identification of issues and more timely regulatory action.

Firms’ responsibilities to handle complaints fairly and promptly remain unchanged, and the Financial Ombudsman will continue to operate independently, making decisions that are fair and reasonable in individual cases. The focus is on improving how the system functions day-to-day, so that it delivers better outcomes more regularly.

We’ll continue to work at pace across the whole of the regulatory system to support the Government’s broader reformsLink is external. But by strengthening cooperation, encouraging earlier resolution and improving transparency now, we’re creating a redress framework that is fairer, more proportionate and effective – one that works better for consumers, provides greater certainty for firms, and builds confidence and trust in UK financial services.

Maurice Titley, Commercial Director Data & Dashboards at Lumera: “The latest data from TPR points to a continued structural shift within the DC market, characterised by ongoing consolidation and steady growth in memberships. The 15% reduction in the number of schemes over the past year, and the longer-term decline, reflects a market increasingly oriented towards fewer, larger arrangements. At the same time, membership growth, driven primarily by deferred members, indicates a maturing system where individuals are accumulating multiple pots across their working lives, and emphasises the challenges the industry faces in areas like small pots consolidation. The continued expansion of master trusts, both in terms of membership and assets, further underlines the importance of scale in the current environment. These trends reinforce the regulator’s direction of travel, where scale, governance standards and operational capability are becoming increasingly important in supporting member outcomes. As the DC market continues to develop, the focus will be on how larger schemes utilise data, technology and scheme design to support members through both accumulation and decumulation.”

TPR Occupational defined contribution landscape in the UK 2025

Based on analysis assessing the impact of pension contribution reforms on the retirement prospects of households, Royal London is urging policymakers to set out a plan to increase default contributions to more adequate levels.

The analysis includes the improved outlook for people reaching retirement and also considers the short and long-term impact on the economy.

It models five reform scenarios, exploring a range of potential changes to auto-enrolment rules, including existing proposals to reduce the minimum age and remove the lower earnings limit, but also making headline increases in default saving rates. Each scenario is designed to reflect international evidence that gradual increases give employers and employees time to adjust, building towards higher contributions over time.

The analysis reveals that most households are currently falling short of both key adequacy benchmarks: the Retirement Living Standards (RLS) and Target Replacement Rate (TRR). By 2040, only 36% of households that have only Defined Contribution pensions are expected to meet the TRR threshold, and just 26% will likely achieve the moderate RLS benchmark. This highlights the need for long-term reform to ensure many more people can enjoy a comfortable retirement.

The modelling also shows that, by 2060, an increased flow of savings into pension schemes would boost UK investment from the pension sector, leading to GDP gains ranging from £0.7 billion to £6.2 billion, depending on the scenario, and illustrating how the benefits of these policies stretch beyond improving pension adequacy.

Jamie Jenkins, director of policy at Royal London, commented: “The analysis makes clear that without higher default contributions, millions of people risk falling short of a decent income in retirement, and it sets out ways in which we might start to address this through increasing contributions over time.

“It also illustrates that, over time, there are benefits to the economy in helping drive growth, something which everyone can benefit from. This is clearly a very challenging period for both businesses and households alike, and now is not the right time to start this journey, but we should make a plan to increase pension saving when that time arrives, and hopefully head off the more significant challenges of having an increasingly large and under-saved population of people in retirement.

“We hope this analysis provides an important contribution to the work of the Pensions Commission, enriching the evidence base for its recommendations.”

Alex Stewart, Associate Director of Economic Impact at Oxford Economics, commented: “Despite the progress made through automatic enrolment, many households are expected to reach retirement without sufficient pension savings in place. Our research shows that reforms to minimum default contribution rates can materially improve pension adequacy. However, our research goes further providing a holistic assessment into how reform will impact the wider economy. We estimate that by 2060 the annual GDP gains from automatic enrolment reform could be as high as £6 billion.”

Manogna Vangari, Insurance Analyst at GlobalData, comments: “In 2024, the MEA reinsurance market was heavily concentrated among a few major players, with the top five reinsurers capturing 64.1% of total premiums. African Re solidified its market leadership, increasing its share from 25.2% in 2023 to 27.2% in 2024. Reinsurers based in the Middle East accounted for 20.7% of premiums, with Saudi Re, Kuwait Re, and Oman Re collectively contributing 15.7%.”

While many reinsurers rely largely on international markets for their business, African Re and Arundo Re are exceptions—each earns the majority of its revenue locally in the MEA, at roughly 87.5% and 80%, respectively. By comparison, Saudi Re draws only about 42.5% of its business from the MEA, with the remaining 57.5% from global operations.

Vangari adds: “Reinsurers across the MEA region face mounting pressure. Countries such as Iran, the UAE, Saudi Arabia, Qatar, Bahrain, Oman, Iraq, Kuwait, and Israel are currently grappling with missile and drone strikes, airspace closures, and trade-route disruptions. Specialized insurance lines—marine, aviation, war risk, hull, cargo, and energy—are seeing sharp premium hikes, policy cancellations, and tighter war-risk exclusions amid rising losses.”

Several members of the International Group of P&I Clubs announced that they will cease providing war-risk coverage for vessels operating in and around Iran—including the Strait of Hormuz’ coastal waters up to 12 nautical miles—and throughout the Persian Gulf from March 5, 2026. These decisions reflect heightened security concerns in one of the world’s most important energy corridors.

In the Gulf region, near-term rate increases for the marine hull line are projected at 25-50%, while some underwriters have already cancelled annual hull war policies under standard seven-day war clauses. However, in response to growing war risks and reinsurers’ refusal to cover risks in the region, the US established a major reinsurance facility in March 2026 through the International Development Finance Corporation and the US Treasury Secretary, under which it will provide up to $20 billion in maritime reinsurance (including war risk) in the Gulf region. This is expected to ease reinsurance capacity in the region.

Vangari continues: “Alongside these challenges, reinsurers are investing in AI to enhance underwriting and pricing, and increasingly adopting AI-powered tools to assess risk and improve operational efficiency. Additionally, regulatory shifts in the region are pushing for greater use of technology. For instance, Saudi regulators now require more robustness in operational risk and data management, which strengthens the case for adopting AI and digital tools.”

Innovation is no longer experimental: modular policies, microinsurance, embedded insurance, and parametric triggers are gaining mainstream traction. Collaboration among insurtechs, fintechs, regulatory bodies, and alternative capital providers is accelerating the development and rollout of these offerings. If reinsurers successfully navigate regulatory, data, and operational hurdles, they stand to significantly expand their reach, relevance, and resilience in a rapidly evolving risk landscape.

Vangari concludes: “Reinsurers in the MEA region are generally operating with strong capital buffers. However, they face severe challenges in specialty lines, including marine, aviation, political violence, energy, and trade credit. Their responses so far have been defensive: demanding higher premiums, tightening terms, and reducing capacity. While immediate risks are manageable as long as conflict remains limited in scope and duration, a prolonged or escalated scenario could place serious stress on reinsurance markets and local insurers across the region.”

Later in the week, central bank decisions will become a key focus for investors. The UK, US, Japan and Eurozone are all expected to leave rates on hold, with Australia being the notable exception, as strong consumer spending and inflation well above target are expected to see rate setters try to take a little steam out of the economy. Over the course of 2026, we expect further cuts by both the Bank of England and the Federal Reserve, but no reductions from the European Central Bank until at least next year. On the other hand, we’re expecting the Bank of Japan to raise rates, with the current interest rates well below the rate of inflation. However, if the current spike in oil prices persists, we may need to revise these views as policy makers grapple with the conflicting inflationary pressure and brakes on economic growth that come with higher energy costs.

Overall, however the war has seen yield curves steepen, which has taken the wind out of gold investors’ sails, and the precious metal dipped below $5,000 per ounce over the weekend before recovering some ground. Keep in mind, it’s still 67% higher on a one-year view, so some profit-taking is to be expected. However, even if central banks don’t produce any surprises this week, all asset classes are likely to prove sensitive to guidance and commentary around the path for rates later in the year.

US stock futures are pointing to a positive start. Tech investors will be assessing the next developments in AI as NVIDIA kicks off its annual GPU Technology Conference (GTC). As well as NVIDIA’s rapid advances across the technology stack, there's also likely to be an increased focus on the revenue generation potential of AI for NVIDIA's customers as the tools build mainstream momentum.

Matt Britzman, senior equity analyst, Hargreaves Lansdown:

“All eyes at Nvidia’s Global Tech Conference will be on what Jensen Huang unveils, with investors hoping to see new chips designed for the next phase of the AI boom, potentially shaped by the company’s recent $20bn move to access Groq’s low-latency technology. Despite posting eye-watering financial results, Nvidia still trades on a relatively modest valuation, with some investors questioning whether it can remain dominant as AI demand shifts from training models to running them in the real world (inference). If Jensen can show Nvidia has the hardware to lead not just in building AI, but in powering its everyday use, this event could be a key moment in building confidence that Nvidia will remain the defining name in the next leg of the AI race.”

HMRC figures show that the frozen IHT thresholds are already set to drive tax receipts to a fifth consecutive annual record haul in 2025/26. The further tightening of the regime will accelerate this trend and the OBR once more uprated its projections for IHT at the Spring Statement, now estimating that the Treasury will collect an extra £0.7 billion, taking total receipts to £70.6 billion, between 2025/26 and 2030/31.

Forthcoming reforms bringing unused pension funds within the scope of inheritance tax from 2027 are also reshaping wealth planning strategies, with pensions historically used as an efficient vehicle for passing on wealth outside the estate.

As a result, Utmost says clients are increasingly exploring lifetime gifting to reduce the taxable value of their estate, with these gifts falling outside the taxable estate if the donor survives for seven years, under the Potentially Exempt Transfer rules. However, advisers warn that outright gifts can leave donors exposed if circumstances change, through life events like divorce, or if beneficiaries receive substantial wealth before they are financially prepared.

As such, rather than making outright transfers, many families are seeking structures that allow them to retain oversight of how wealth is distributed to future generations.

This approach, often described as ‘gifting with control,’ can involve placing assets into trusts or other planning structures allowing funds to be released gradually, for example when beneficiaries reach certain ages or life milestones.

Discretionary trusts are often used in these strategies as they allow trustees to retain flexibility over how and when funds are distributed. Utmost analysis of Trust Registration Service (TRS) data earlier this year showed that 121,000 new trusts were registered in 2024/25, taking the total number to 835,000 with the majority of trusts paying.

Mark Jephcott, Senior Relationship Manager at Utmost’s wealth advisory business, said: “With inheritance tax receipts continuing to increase and further tightening of the regime being implemented over the rest of the decade, many families are reassessing how and when they pass on wealth.

“Historically many clients expected to use pension assets as part of their legacy planning, but with those funds falling within the inheritance tax net from 6 April 2027, lifetime gifting is becoming a more common part of that conversation.

“Rather than making outright gifts, families are increasingly looking at structures, like trusts or insurance-based solutions, that allow wealth to be transferred while retaining a degree of control over how it is used. These controls can be relaxed at specific milestones and help to ensure assets are protected and passed on efficiently while supporting long-term family objectives.”

For advisers, the shift reflects a broader change in how clients approach succession planning. Instead of treating inheritance as a single event, families are increasingly planning how wealth will move between generations over time, balancing tax efficiency with responsible stewardship.

The trend highlights the importance of early planning, particularly as frozen thresholds and evolving tax rules continue to increase the number of estates potentially exposed to inheritance tax.

As a result, discussions around structured gifting, governance and intergenerational wealth planning are becoming an increasingly central part of financial advice for wealthy families.

"The early days of the Russia-Ukraine war still casts a long shadow. Then, policymakers underestimated the persistence of inflation and found themselves forced into a more aggressive tightening cycle than intended. The Bank is determined not to repeat that mistake. Inflation expectations have nudged higher, oil volatility is clouding the incoming data, and sterling has slipped as the dollar gains from the US’s advantageous terms of trade as a net energy exporter.

"Investors, too, carry the scars of 2022, when equities and bonds fell simultaneously. Some will worry we are heading for a repeat. I’d temper those concerns. Rates and yields are already far higher than they were in early 2022, making another dramatic reset in the price of money less likely. And whereas inflation then was fuelled by both excess demand and disrupted supply, today’s pressures are almost entirely supply-driven.

"Higher energy prices are more likely to divert spending away from discretionary categories and suppress activity elsewhere rather than ignite a demand boom. That argues for central banks postponing cuts they had expected to deliver — not preparing to re-tighten policy. Even so, the substantial tail risk of a longer energy supply constraint and further upward inflationary pressures means that we remain reluctant to venture too far down the duration curve in terms of fixed income allocations.

"Across the Atlantic, the Fed faces a similar dilemma. Cuts have been pushed further out, with some pricing drifting into 2027, and financial conditions have quietly tightened. But the US enters this period with comparatively stronger economic momentum and a currency strengthened by terms-of-trade dynamics. Even so, Chair Kevin Warsh’s arrival brings uncertainties of its own — supportive of lower rates in principle, but also keen to shrink the Fed’s balance sheet, a shift that could unsettle liquidity conditions.

"Against this backdrop, the Bank of England is unlikely to surprise this week. Rate cuts once seen as plausible for spring have been fully priced out, and a rise later in the year can’t be dismissed. With the duration of the conflict unclear, the most probable outcome is a holding pattern: not tightening, but certainly not loosening until the fog lifts.”

Many firms have more sophisticated models, better tools and more data than ever before. This is positive, but it can also create a false sense of comfort. Models may appear robust, yet they are often still built on limited data, judgemental assumptions and a degree of uncertainty that doesn’t show up in the final figure. Modelling technical price alone is not enough; it needs to sit within a wider pricing framework that recognises both what models can tell us and what they cannot.

Too much reliance on technical pricing at an individual risk level can be misleading. However, dismissing technical pricing altogether is far more dangerous.

The market price, by contrast, is shaped by competition. It reflects available capacity, broker influence and growth targets. These forces intensify as capacity expands and competition increases.

A gap between technical and market price is inevitable. What matters is not the existence of the gap, but how well you understand and manage it.

For example, a portfolio may show favourable loss ratios this year because it is still benefiting from last year’s pricing. Meanwhile, new business is being written at thinner margins. On paper, performance looks healthy. In reality, the risk profile may already be shifting.

This claims lag can lead to a false sense of comfort. By the time deterioration shows up in the numbers, the portfolio has already changed shape.

Technical pricing remains critical in this environment. It gives you a consistent reference point to the underlying risk when market signals become unreliable. It is not a price that must always be achieved, but a way of understanding how far the business is moving away from its risk-based view and whether that movement is deliberate.

Without that anchor, under-pricing can build gradually. When correction comes, it is often sharper and more painful than it needed to be.

If you treat it as a reference point, it becomes easier to see what is actually happening. For example, are you winning new business based on quality and risk selection, or on price concessions? Are certain brokers consistently outside technical levels? Are technical price overrides becoming routine rather than occasional?

Problems tend to arise when models are overridden routinely without understanding why. Over time, those adjustments can become systematic, effectively changing your assumptions without scrutiny or validation. These patterns matter more than any single deal.

On the other hand, insisting on achieving the technical price in all circumstances is not the answer. Doing so can reduce competitiveness, encourage model manipulation, and reinforce the perception that actuarial pricing is disconnected from market reality. The aim is not perfection but, rather, informed decision making.

In practical terms, this means tracking how far and how often pricing departs from technical levels, asking for a clear rationale when deviations persist, and using model outputs to support discussion rather than to restrict decision making.

Many actuarial teams have strong technical capability, but less clarity on how to turn those outputs into insight for the business.

That does not mean building a long list of metrics. A small set of focused measures is often more effective. For example: how rate change compares to changes in technical adequacy, how often (and by how much) technical prices are overridden, where win rates are increasing, and whether technical inadequacy is concentrated in certain brokers or segments.

In practice, this can be challenging. Data often exists but it sits in different place, and discussions tend to focus on approvals rather than what the decisions add up to over time.

Even firms with sophisticated models can struggle to interpret divergence, translate outputs into insight and design management information that prompts timely action.

Used properly, technical pricing does not prevent commercial decisions. Rather, it ensures that they are well-informed and deliberate.

In the next article in this series, we look at where technical pricing ends and judgement begins, and who decides how far to follow the market.

A real hunger to know more about pensions and retirement finances, albeit starting from a low base of knowledge

It was a tough session for US markets last night, with the S&P 500 falling 1.5%, and futures pointing to more weakness heading into this afternoon's open. Investors are starting to question the assumption that the conflict in Iran will be a short-lived disruption, as increasingly heated rhetoric heightens the risk of sustained pressure on energy prices. Growth stocks were among the hardest hit, lagging value by around half a percentage point as markets leaned more defensively. Interestingly, software names have quietly become a bit of a hiding place for investors, climbing 6.5% so far in March after taking a bruising in recent months.

Energy markets are looking relatively calm this morning, but with oil prices still hovering around the $100 mark and weekly gains of roughly 8%, there’s been little real let-up. Traders are continuing to weigh the fallout from the conflict with Iran, with no signs of de-escalation and production disruptions keeping supply concerns front of mind. With the Strait of Hormuz essentially closed, any measures to relieve price pressure are likely to be little more than a temporary stopgap.

Gold is on track for back-to-back weekly losses, as its traditional safe-haven appeal takes a back seat. The prospect of elevated energy prices, sticky inflation, and the knock-on impact of higher interest rates is proving a bigger concern for investors right now. Neither of those are particularly supportive for holders of a non-productive asset like gold, which doesn’t offer any income to offset higher rates.”

The report, commissioned by a coalition of nine leading digital pension platforms including AJ Bell, Freetrade, Hargreaves Lansdown, Interactive Investor, J.P. Morgan Personal Investing, Moneybox, Monzo, PensionBee, and Vanguard, reveals just how fundamental a modernisation of the "plumbing" of the pensions market is to securing improved retirement outcomes and realising the economic growth afforded by digital pension platforms.

The analysis finds that the direct-to-consumer digital pension sector has already become a central pillar of the UK economy, with £139 billion in assets under management—equivalent to 5% of UK GDP. By 2055, this sector alone is projected to contribute £9.1 billion to the economy through higher productivity and £9.0 billion through increased pensioner incomes.

Savers are currently confined by a 180-day statutory limit on transfers, a limit that seems out of touch with the rest of modern finance where a bank account can be switched in seven days and a Cash ISA transferred in fifteen. The report exposes how legacy providers often use "sludge" practices—such as requiring signatures on paper forms—to delay transfers. Even more concerning is the "outright misuse" of anti-scam legislation, where firms trigger "amber flags" for schemes provided by prominent FCA-regulated providers, for example.

These digital platforms have evolved from niche products into a mainstream lifeline, and for the UK’s four million self-employed workers, these digital platforms are not a luxury but a necessity. Self-employed workers are largely shut out of traditional workplace schemes, and currently, only 20% of the self-employed contribute to a private pension, and a staggering 55% are on track to retire with nothing but the State Pension. Digital personal pensions offer the flexibility and transparency these workers need to manage irregular incomes and consolidate multiple "fragmented pots" to provide a better retirement. Engaging workers more effectively with their pension pots is the first step to boost engagement and contribution rates.

The coalition of firms including AJ Bell, Freetrade, Hargreaves Lansdown, Interactive Investor, J.P. Morgan Personal Investing, Moneybox, Monzo, PensionBee, and Vanguard, is calling on the Government to adopt a series of "quick wins" and long-term reforms to get people engaging with their savings again.

Chief among these is the reduction of the transfer deadline to 30 working days and the introduction of a "digital-first" presumption that makes manual paperwork the exception rather than the rule. The report also recommends a universal "due-diligence checklist" to ensure transparency over the reasons for blocking transfers, alongside a long-term Pensions Tax Roadmap to avoid the harmful speculation that precedes every Budget.

The nine leading digital pension platforms recommend that:

Slash Transfer Deadlines: Amend DWP regulations to reduce the statutory transfer backstop to 30 working days.Digital-First Presumption: Mandate that digital journeys become the default, requiring firms to "comply or explain" if they insist on manual paperwork.Standardised Due Diligence: Introduce a universal "clean list" and checklist to prevent providers from inventing arbitrary reasons to block transfers.Pensions Tax Roadmap: Establish a long-term roadmap to end the "deleterious" consumer harm caused by speculative tax rumors before every Budget

As the Government prepares for the 2026 Pensions Dashboard launch, the report warns that increased visibility without a modern transfer system will only lead to mass consumer frustration.

By implementing these recommendations, policymakers can ensure that the retail personal pensions market—which could ultimately contribute up to £104 billion to the economy—continues to provide the choice and flexibility savers desperately need.

Brian Byrnes, Director of Personal Finance at Moneybox said: "The overall customer experience is only as good as the slowest innovators, and savers should not still be relying on paper processes in 2026. For too long, legacy providers have lagged in adopting innovations that improve saver engagement and outcomes. The FCA must look beyond headline statistics and examine why pension transfers so often stall. There are cases where providers flag ‘overseas investments’ while offering the same global tracker funds themselves, raising questions about whether these flags are being used to frustrate legitimate transfers and retain customer funds."

Lisa Picardo, Chief Business Officer UK at PensionBee: "Pensions belong to savers, not the Government or providers. Individuals carry the risk if their retirement savings fall short, so they should have real choice over how and where their money is invested. They must also be free to move providers easily, yet the transfer process still isn’t fit for purpose. As workplace schemes consolidate, and investment strategies converge and move towards private markets, it’s vital that savers can still vote with their feet when it comes to what may be the biggest and most consequential pot of money they'll ever own."

Tom Selby, Director of Public Policy at AJ Bell: “With the development of the pensions environment at a pivotal crossroads, decisive policy action has never been so important. Government, regulators, and the pensions industry need to work together to tear down any existing barriers to support the government’s retail investing drive and turn Brits from savers into a nation of investors. Driving down transfers times across the market is essential, as is aligning the regulatory approach for retail and workplace pensions so we can deliver better outcomes for investors and support the UK’s retail investment ambitions.”

Viktor Nebehaj, CEO at Freetrade: “The current pension transfer system is not fit for purpose. At a time when consumers can switch bank accounts in days, it is unacceptable that pension transfers still have a six month deadline. Outdated, manual processes restrict choice, frustrate savers and risk undermining the benefits digital pension platforms can deliver. We need urgent reform to make pension transfers faster, simpler and fit for modern consumers.”

Helen Morrissey, Head of Retirement Analysis, Hargreaves Lansdown: “The pensions market is changing and personal pensions have a growing role to play, helping people take control of their savings, and understanding how to build for the retirement they want. Regulation should support this end with transfers taking days not weeks. The current pension transfer system is woefully out of step with wider financial services. Longer term we would like to see government revisit the Lifetime Pension Pot set up which allows people to choose which provider receives their contributions. It’s a step that enables people to keep track of their pensions and could be a gamechanger in how people engage with them.”

Colin Doyle, Head of Pension Investors at interactive investor: “This report surfaces crucial insights on the value and evolution of the UK personal pensions market, highlighting the need for greater engagement and awareness – which chimes with the findings of our latest Great British Retirement Survey. We’re proud to play our part in reshaping the UK DC pensions space by continuing to innovate and educate, helping meet a diverse set of consumer needs. The actions in this report are a welcome wake-up call for our industry and policymakers – we’ll continue to fight for consumer confidence to help them take control of their financial futures.”

Jo Phillips, General Manager, Pensions, Investments and Savings at Monzo: “As a leading digital bank with more than 14 million customers, we transfer thousands of pensions every month - that’s around two requests every minute. This demand shows how a simple, digital-first, and transparent pension product can truly engage people with their retirement savings. We support reforms that empower and protect consumers while enabling innovation, competition, and seamless transfers to thrive.”

James Larsen, Head of Strategy and Offer, Vanguard UK Personal Investor: “We need standardised, digital-first pension transfers and a shift from a 180-day statutory limit to 30 working days. Delays leave savings stuck or uninvested and people disengaged. A system that works better for pensions savers will give more people a better chance of a comfortable retirement.”

In 2025, DB sponsors paid more than double into DC pensions than into their DB schemes and with the upcoming surplus legislation, some may even start to take cash back from their DB schemes. Looking ahead over the next 25 years, the system is poised for further evolution - we anticipate shifts towards collective models, mega master trusts, AI-driven personalisation, and a renewed focus on retirement adequacy and intergenerational fairness.

Actuarial valuations 25 years ago were subject to very different requirements (but in spite of what some of my younger colleagues claim, valuations in 2000 did not involve the use of slide rules, even if assumptions were generally somewhat simpler than they are now!). The Pensions Regulator and the scheme-specific funding regime did not exist, and scheme funding requirements were driven by a combination of scheme rules and the Minimum Funding Requirement (MFR), which only came into force in 1997, but was already starting to show signs of creaking after just a few years.

With the bursting of the dot-com bubble and other pressures proving too much for the formulaic approach taken by the MFR, early 2000s failures such as Allied Steel and Wire highlighted the absence of an effective safety net for members of underfunded schemes whose sponsors collapsed. In response, the Government established the Pension Protection Fund (PPF) in 2005 to provide a statutory backstop for members of failed schemes and at the same time created the Pensions Regulator (TPR) to oversee a new scheme-specific funding regime. Wind-up debts on solvent employers were strengthened to the cost of buying out benefits with an insurer. These reforms reflected a strong policy focus on increased protection for accrued benefits in DB schemes, in spite of increasing costs and the wave of schemes closing to new entrants and to future benefit accrual.

Just over a decade later, the collapse of BHS (2016), and British Steel (2017–18) highlighted that the new regime still did not protect members' pensions in all circumstances, prompting Government pressure for further enhancements to security. By 2025, only 4% of private-sector PPF-eligible DB schemes remained open to new members, and active membership had fallen below one million[1].

Auto-enrolment required employers to enrol eligible workers into a pension scheme by default. By 2018, over 10 million people had been newly enrolled, and participation among eligible private-sector employees rose from 40% to 88%. Alongside public-service backed master trusts like NEST and not-for-profit providers like The People's Pension, successful commercial arrangements such as LifeSight expanded rapidly, reflecting employer demand for scale, governance, access to a wider range of asset classes and advanced engagement tools.

However, the minimum contribution rate of 8% was widely seen as inadequate. Analysts warned that most savers would not achieve DB-style replacement rates. By 2025, policymakers were considering reforms to increase contributions, lower the starting age, and remove earnings thresholds to improve adequacy.

British Steel illustrated the dangers of members receiving poor financial advice, prompting the FCA to tighten rules and mandate guidance. Pension Wise was launched to help individuals navigate their options, but many still struggled with complex decisions. By 2025, the industry was exploring default drawdown options and collective decumulation models to support retirees.

TPR launched a consultation on a new Funding Code (the "Code") in March 2020, just as the country crashed into lockdown. After extensive and prolonged debate, the new funding regime finally came into effect for valuations with an effective date on or after 22 September 2024. By the time the Code came into force, many of the funding concerns that had originally motivated reform had been substantially eased by rising gilt yields, fundamentally altering the scheme funding landscape that the Code would operate on. With the UK economy in a very different position to when changes were first considered by Government, the political focus has, however, very much shifted from benefit security to economic growth and the potential for surplus sharing agreements, potentially limiting the extent to which the new framework drives more conservative funding outcomes.

The FCA focused on improving DC governance and addressing the advice gap. The PPF grew into a robust institution, managing over £30 billion and protecting hundreds of thousands of members.

Tax rules also changed many times. The Lifetime Allowance was introduced, reduced, and eventually abolished in 2024. The Annual Allowance was tightened, affecting high earners and prompting calls for simplification.

The next 25 years in pensions look to be just as transformative. Building on today's trends and new developments, we consider what the next quarter of a century may hold.

Viewed through the lens of constrained public finance, CDC represents a potentially durable compromise. It offers improved adequacy and longevity protection without creating open ended guarantees that sit uncomfortably with rising public debt, ageing populations and pressure on sponsors' balance sheets.

By 2050, most DC assets will be managed by a handful of mega master trusts, each with hundreds of billions in assets. Smaller schemes will merge or exit, driven by regulatory pressure and the need for scale. The contractual override facility will enable providers to move their GPP book of business into their master trust facility, further increasing scale and consolidation.

On the DB side, most schemes will have bought out their liabilities with insurers or transferred them to superfunds acting as commercial consolidators. Superfunds' regulatory limbo will be a distant memory, and looser eligibility criteria will have made them a mainstream endgame option – consolidating hundreds of schemes.

For members, consolidation can lead to greater simplicity. Portability and coverage will improve, and self-employed workers may be auto-enrolled via tax systems, all supported by advanced dashboards offering real-time balances, projections, and guidance.

AI will help retirees manage drawdown, forecast income, and make informed decisions both through its deep integration across the financial system, broader awareness of the individuals' broader lifestyle context, as well as through a wide range of AI-powered devices that retirees use. Regulators will need to ensure transparency and fairness in the application of AI, and cybersecurity will be critical. Greater reliance on opaque models will require strong governance, explainability and accountability.

While calls for flat-relief tax relief continue, practical challenges mean that significant reform remains elusive. We're likely to see continued refinement of existing allowances and incentives, with Governments balancing fiscal sustainability and fairness. Over a 25 year time horizon, however, as public finances come under increasing strain, the Government may be forced to confront more fundamental trade-offs between fiscal sustainability, incentives to save and perceptions of fairness across generations.

Auto-enrolment minimum contributions rise, through an increase in their percentage and the extension of the earnings band they apply to. By making employer contribution rates more visible to prospective employees, governments aim to sharpen focus on contribution adequacy and re-establish pensions as a differentiator in recruitment and retention, particularly in tight labour markets.

The triple-lock is eventually broken and the state pension age continues to rise to reflect demographic realities, policymakers may introduce more flexible options - such as early access for those unable to work longer due to health or occupational factors.

The UK pension system has evolved dramatically from 2000. If the past quarter century was about managing the decline of DB, the next is likely to be about how risk is shared – between generations, employers, individuals and the state. They will test whether the pensions system can be resilient, adaptive and fair in a world shaped by technological acceleration, demographic change and constrained public finances.

This morning’s RICS UK Residential Market Survey showed that the headline net balance for new buyer enquiries slipped from -15% to -26% in February as prospective homeowners exercised caution due to heightened geopolitical and macroeconomic uncertainty, and a difficult mortgage market. Price rise expectations have also moderated but remain positive on a 12-month view. The depth and length of hostilities in the Middle East are likely to remain a key influence on buyer sentiment. Valuations amongst the UK housebuilders look attractive, but the current environment means investors may need to show patience. Some players are better placed than others to navigate the challenging outlook with Persimmon’s substantial land bank, relatively low price point and balance sheet strength making it a worthy of contender for those seeking exposure to the sector.

US stock futures have fallen this morning after a mixed performance by the major indices on Wednesday. The tech-heavy NASDAQ managed to keep its head above water as Oracle’s results provided further evidence of surging demand for computing power, sending the stock up 9% with US-listed semiconductor names broadly in the green. Shares in Uber were up as the ride-hailing pioneer announced a strategic partnership with Amazon-backed robotaxi developer Zoox. Passengers could be taking a trip down the Las Vegas strip as soon as this summer. Uber’s doing the right thing by attempting to future-proof its business, but there are some big questions around the ability of Zoox to scale. The same can’t be said of Tesla however, and it’s Elon Musk’s route to market that’s likely to drive the future of autonomous taxis.

The US Consumer Price Index read out for February was thankfully uneventful, with price rises unchanged at 2.4%, bang in line with economists’ forecasts. In quieter times, that would be taken as a positive, but these figures haven’t captured the recent spike in energy prices. While the numbers do point to a picture of underlying price stability, interest rate expectations are likely to be dominated by geopolitical events for a while yet. While the likely timing of further reductions in borrowing costs has been pushed out a few months markets are still expecting at least one rate cut by the Fed this year.”

“At the start of the year markets had priced in two cuts for 2026. Inflation was cooling and on track to hit the Bank’s 2% target by early spring, and the economy was, in its words, ‘subdued’. Then came December’s jobs data which showed unemployment had shot up to a five-year high at the end of 2025 and looked set to rise further as the impact of the chancellor’s first Budget hit home.

“The potential that the Bank may have to inject a bit of oomph into the UK economy led to increased speculation that two rate cuts might not be enough stimulus, and that base rate could fall as low as 3% by the end of the year.

“But the escalating conflict in the Middle East has sent shockwaves through the global economy and that’s going leave MPC members stuck between a rock and a hard place. Energy prices have shot up, with the price of oil particularly volatile as shipping chains are disrupted and some production is suspended as Iran seeks to use energy as a weapon in the conflict – indeed, it has warned the world should be ready for prices to surge over $200 a barrel.

“Markets are already pricing in the unwelcome return of uncomfortable levels of inflation, with bond yields rising significantly and investors eyeing the UK as particularly sensitive to an energy shock. Preventing inflation from spiralling once again will be at the forefront of rate setters’ minds when they sit down to re-write the Bank’s playbook next week.

“But they face a difficult balancing act of curbing price hikes without completely stalling the country’s economic engine, which is already spluttering. Whilst the return of double-digit inflation seems unlikely, anyone trying to plot its course might wish for another pot of tea to stir, because right now the leaves are impossible to read. The key consideration will be the duration of the conflict, and whether it ends decisively or if attacks on shipping and energy infrastructure continue beyond any declaration of victory by the US president.

“Airfares are already soaring, the price at the pump will make motorists wince, and a much-desired drop in the energy price cap in the summer is most certainly off the table. During the last cost of living crisis businesses gave staff inflation-busting pay increases that helped households cope but also meant the inflationary spike became far stickier than the Bank of England might have hoped for. This time the labour market is slack, companies have already had to deal with increased labour costs thanks to changes to NI contributions, and many will feel unable to dig any deeper when it comes to pay.

“Hiking rates at a time growth has gone AWOL and unemployment is already high raises the ominous spectre of ‘stagflation’, and that’s something no-one wants to see take hold. Faced with an overwhelming number of unpredictable variables, nobody expects the Bank to do anything other than wait and see. But this decision will still be a difficult one, and close attention will be paid to any guidance about the path ahead.”

Typically, customer information within insurance firms is stored separately across multiple business lines such as motor, home, health and pet, with little ability to link records and create a cohesive customer view. The result is a fragmented understanding of risk and protection needs.

A single customer view (SCV) brings those fragments together, enabling insurance providers to understand each customer in context, as an individual with unique and evolving needs.

Crucially, a connected view of customers also strengthens how insurance providers identify and support vulnerable customers. Vulnerability can stem from four main drivers — poor health, low capability, reduced resilience or negative life events such as redundancy or relationship breakdowns. When indicators emerge in one part of the business, they should inform interactions everywhere.

When customer data becomes linked across sales, underwriting and claims, teams no longer need to rely on fragmented or inconsistent records. Instead, every function sees the same customer reality and can adapt communication and decision-making appropriately.

By unifying identity intelligence across the value chain, insurance providers avoid siloed views, reduce repeated questioning, and can help ensure that vulnerable customers receive fair, empathetic and consistent treatment at every touchpoint. A truly operationalised SCV is one that supports both inclusion and Consumer Duty compliance.

Equally, when vulnerability indicators or life-event triggers are integrated into the insight, insurance providers can adapt communication and claims processes in ways that protect customers during moments of stress or change.

The result is both commercial sustainability and social value: inclusion through understanding.

At LexisNexis Risk Solutions, we help insurers do exactly that: turning fragmented datasets into actionable intelligence that strengthens customer understanding and outcomes. With data-linked insights available at quote, renewal and claim, insurance providers can deliver fairer pricing, smoother journeys, and stronger retention — all while meeting regulatory expectations around fairness and vulnerability.

These challenges align directly to the capabilities a single customer view can deliver, including:

• Detailed segmented analysis, especially for vulnerable customers — reducing blind spots and helping firms evidence fair outcomes.
• Connecting data across teams to challenge assumptions and drive change — replacing manual processes with insight-ready intelligence.
• Improved data quality — a core FCA expectation, supported by consistently linked, verified customer information.
• Better visibility of customer segments and vulnerability characteristics — enabling firms to identify and support vulnerable customers.

The FCA’s own Consumer Duty findings reinforce this direction of travel[iii]. Good practice examples emphasised high-quality MI and meaningful analysis of different customer types, including those with vulnerability characteristics. However, areas for improvement centred on data quality, insufficient segmentation and a lack of evidence showing firms fully understood differential customer outcomes.

A single view of customers can directly address these concerns. Whether detecting early signs of financial vulnerability, understanding affordability pressures behind motor premium sensitivity, or strengthening fraud prevention through identity-linked insight, SCV provides the analytical foundation the Consumer Duty demands.

By embracing the single customer view — supported by enriched, connected data that meets both customer needs and regulatory expectations, insurance providers can bridge the protection gap, personalise experiences and help ensure that the promise of insurance — security, fairness, and peace of mind — reaches everyone.

[i] https://www.gov.uk/government/publications/financial-inclusion-strategy/financial-inclusion-strategy#financial-resilience-through-insurance-1

[ii] https://www.knowhow.cii.co.uk/news/2025/new-cii-report-highlights-key-challenges-in-consumer-duty-board-reporting/#:~:text=Findings%20were%20drawn%20from%20a,submitted%20their%20first%20mandatory%20reports.

[iii] https://www.fca.org.uk/publications/good-and-poor-practice/consumer-support-outcome-good-practices-areas-improvement#revisions

A new scam alert issued today to more than 35,000 pension industry professionals by TPR, in collaboration with City of London Police (CoLP), warns that fraudsters are posing as pension savers to gain access to their retirement pots.

The criminals get hold of savers’ personal information and use it to breach security checks and access their accounts. They then change the bank details or set up a fake account in the saver’s name to divert funds and steal hard-earned retirement savings.

Around £500,000 was reported lost and around a further £2.5 million were at risk between 2021 and 2025.

But TPR warns similar risks apply across other jurisdictions and has renewed its earlier warning about impersonation fraud.

Every report counts

Gaucho Rasmussen, TPR’s Executive Director, Enforcement and Legal Group, says: “Fraudsters will stop at nothing to get their hands on savers’ pension pots. And no one is immune. We are urging the pensions industry to act immediately to protect savers by strengthening their defences and ensuring their members do the same.

“As a pensions professional, you are the first line of defence against scammers and it’s vital you also report any suspicions to the new Report Fraud service.”

The intelligence behind the latest industry alert came largely from the pension industry, with 90% of the reports made by trustees and administrators.

“This latest scam warning demonstrates just how valuable intelligence from industry is in protecting savers,” Gaucho added. Every report counts, allowing us to identify threats and take joint action with our Pension Scams Action Group partners to prevent harm to savers. Together, we can stop criminals in their tracks.”

Report Fraud, the new national reporting service for cyber crime and fraud, replaced Action Fraud in December.

Chris Bell, Service Delivery Director at the City of London Police, said: “It’s important we collaborate with our partners to ensure every measure is taken by both industry and savers to protect pension pots – criminals will go to great lengths to impersonate and try to steal lifetime savings. That’s why Report Fraud, which is run by the City of London Police, supports this alert to urge everyone to protect their pension accounts and stay vigilant to fraudsters attempting to gain unauthorised access.

"Anyone who suspects fraudulent activity should tell Report Fraud. Every report counts - this new service is designed to enhance intelligence sharing across industry and the public and contributes to warnings like this. This alert demonstrates impact of ongoing partner collaborations, especially between public and private sectors, enabling us all to tackle fraud where possible and protect pension customers and their life savings.”

Close analysis of reports to Report Fraud continues

TPR launched a new digital campaign on 23 February, encouraging the pensions industry to report suspicious activity to Report Fraud.

All reports relating to pension fraud continue to be closely analysed by our TPR intelligence analyst embedded in CoLP. This collaboration is part of a wider partnership to accelerate the disruption and prevention of pension fraud, as well as to improve the reporting journey.

Pension professionals can find out more about Report Fraud, the Government’s new Fraud Strategy and the latest in the fight against pension fraud in our free live PSAG webinar on 18 March 2026.Lord Hanson, the Fraud Minister, will be amongst those taking part.

“That said, introducing a cap at any level still risks adding unnecessary complexity for employers and confusion for savers. Our research shows that nearly two thirds of employees weren’t even aware a restriction was planned, despite more than half already using salary sacrifice today. With many employers also seeing the system as complicated to operate, policymakers should ask whether the additional administrative burden of a cap and the uncertainty it creates is really worthwhile.

“Salary sacrifice has been an effective mechanism for encouraging retirement saving while helping employers manage costs. A good system should make pension saving accessible to all – including smaller businesses and their workers – but also be simple enough for employers to run and employees to understand. Policies that support employers in maintaining strong pension provision ultimately benefit employees and the wider economy too.”

Transparency was not the only factor contributing to the decision to ignore advice. A third (33%) felt the advice they received was not right for them at the time, and just over a quarter (27%) weren’t clear on the outcome of their adviser’s plans. 28% of investors argued that the advice received went against their values.

Meanwhile, almost three in ten (29%) admitted they had chosen to follow the advice of friends and family over their adviser.

Half (49%) of investors see AI as a good starting point for financial planning but will continue to seek specialist human-led advice for the more complex elements.

It remains that more than a third (36%) of people would like to engage with real-life advisers from the start, just 9% said they would prefer no human contact at all.

Jenny Davidson, Intermediary Wealth Director at Scottish Widows, said: “The ‘honesty gap’ remains a significant challenge for advisers. When people withhold or overlook key details, it can directly affect the quality and relevance of the financial advice they receive. And while friends and family may feel like a natural first port of call, their guidance may lack the professional and impartial expertise of regulated financial advice.

“Ultimately, effective advice only works on trust - and without transparency, there is a real risk that individuals make decisions that could lead to poorer financial outcomes. One of the potential benefits of AI is clients may feel more comfortable opening up and sharing information they may hesitate to disclose face-to-face. However, the human element remains essential for navigating more nuanced decisions.

“As trust in AI-powered tools grows, the need for openness and confidence in the advice process remains just as important. AI will play a role in the future of advice, particularly for Targeted Support and more transactional needs. However, the strongest outcomes are likely to come from a human-in-the-loop approach - enhancing, rather than replacing professional expertise for clients with more complex investment requirements.”

The latest employee workplace pensions statistics from the Office for National Statistics reveal this gender gap remains in private sector pension savings, with 76% of female employees having a workplace pension compared to 81% of male employees. What’s more, women are receiving lower average employer contributions. Using qualifying earnings for the public sector, the median employer contributions were 27% for men and 26% for women, and in the private sector, median employer contributions were 6% for men and 5% for women.

Holly Tomlinson, financial planner at Quilter, shares three tips to help you prepare for the future and make the most of your finances: “The gender pay and pension savings gap during working life is substantial, and this inevitably carries through into retirement, leaving women with far smaller pension pots. Women also continue to take on the lion’s share of caring responsibilities, which directly feeds into why these gaps persist. Without careful financial planning, the long-term consequences of this can be significant.

“For women who have already experienced career breaks, it is also worth reviewing whether voluntary contributions could help close any gaps. These small steps can make a significant difference to your entitlement in later life, and they help prevent women from falling further behind in retirement compared to their male counterparts.”

“Protection products such as critical illness, life assurance or income protection are often provided by employers as a workplace benefit. However, for mothers taking a career break this can mean that they are left unprotected.

“In addition to having protection in place for the mother while she is out of work, the primary earner will also need to make sure their cover is substantial enough. Childcare can be enormously expensive and if the primary earner needs to flex their hours to allow them to also become the primary carer, be that because the mother has fallen ill or worse passed away, then this can have a huge impact on a family’s finances. Having financial protection in place for a single mum is even more important as the family will be totally reliant on her income.”

But given that the fighting is continuing and the key Strait of Hormuz remains impassable, worry is still percolating. Oil prices remain more than 25% higher than before the conflict began. Trump has pledged that the US Navy will provide a guard for tankers through the Strait, but any timeline for that is highly obscured, with forces for now focused on taking out military infrastructure rather than becoming ship escorts.

Until a longer-term resolution is found, companies and consumers are still set to pay the price for the attack by the US and Israel on Iran. The repercussions for an array of everyday costs affecting companies and households are becoming clear. Prices at the pumps have already increased, and motorists are being warned to drive more conservatively to offset an expected further rise in costs. More generous fixed-rate energy tariffs have been scrapped, and households are bracing for a rise in the energy price cap in July. Borrowing costs are set to stay elevated for longer due to the inflation pressures higher energy costs will bring, and better mortgage deals have been withdrawn.

Nevertheless, a balm has been put on the worst of the fears amid hopes there could be a faster resolution to the conflict. Concerns that a severe inflationary shock could occur - which could see interest rates rise later this year - have abated. Even so, policymakers at the Bank of England are set to stay in wait-and-see mode and keep rates on hold for many months until the full repercussions for consumer prices become clear. Decision-makers at the US Federal Reserve are also set to remain highly cautious as they try to work out whether the bigger worry should be inflation or sharply slowing growth, with the February jobs data already indicating nervousness among employers. The shock of war and the spike in energy prices may act as a drag on consumer sentiment, with shoppers likely to curtail some spending amid the uncertainty. Ultimately it will depend on how transitory the surge in energy prices proves to be.”

Shalin Bhagwan, PPF Chief Actuary, said: "The aggregate surplus rose by £8.1 billion to £273.7 billion in February. There were positive returns on all asset classes, causing aggregate assets to rise by over 3 per cent, and the corresponding reduction in gilt yields caused liabilities to rise by a similar percentage. Early March has brought renewed volatility as geopolitical developments affect inflation expectations and interest-rate outlooks, underlining that funding levels remain sensitive to market conditions even as they continue to show resilience."

British households have already weathered a succession of global shocks in recent years, from the Covid-19 pandemic to the war in Ukraine and global trade tensions, and many families are understandably wary of further pressure on their finances.

Maike Currie, VP Personal Finance at PensionBee, comments: “Geopolitical tensions can quickly ripple through financial markets, affecting everything from oil prices to share prices. While markets tend to recover from short-term shocks, the longer-term impact is often felt in household finances - through higher living costs and volatility in pension investments. When energy prices surge at a time of weak growth, it raises the risk of stagflation, which can make the economic outlook more challenging for families and investors alike.”

Here are five ways the latest escalation in the Middle East could impact your personal finances and pension.

Maike Currie, VP Personal Finance at PensionBee adds: “Market ups and downs are part and parcel of long-term investing. For pension savers, this may show up as fluctuations in the value of their pension pot. While this can be unnerving, it’s important to remember that pensions are ultimately long-term investments, typically spanning decades. Over that time, markets have repeatedly demonstrated their resilience, recovering from wars, recessions, pandemics and political shocks.”

The Broadstone Sirius Index reports its update for February 2026 with the fully hedged scheme outperforming the half-hedged scheme in the face of falling gilt yields.

The funding level of the fully hedged scheme increased by 1.1 percentage points from 71.8% at the end of January to 72.9% at the end of February. This marks its strongest funding position since September 2022.

The funding level of the 50% hedged scheme fell back slightly from 108.9% at the end of January to 108.7% at the end of February remaining broadly similar to levels seen at the start of the year.

Chris Rice, Head of Trustee Services at Broadstone, commented: "Many defined benefit schemes are in a strong position following increasingly hedged strategies and positive returns on growth assets over the last year or two.

“The instability in the Middle East casts a shadow over investment strategies and outcomes presently. The turbulence has the potential to being a roller coaster ride on financial markets, so schemes and their trustees should make sure they have their investments well managed to protect their funding positions.”

“Tipping over the $100 a barrel level has major implications from a psychological and economical perspective. It significantly raises the chances of a sharp jump in inflation and interest rates shifting to a completely different path than the market had priced in only two weeks ago. Markets are now pointing towards a situation where UK interest rates could remain level for the rest of the year and potentially go up in 2027. That is radically different from recent expectations of more cuts this year.

“Investors are now weighing up the prospect of the Iran conflict lasting longer than they previously thought. Risk appetite has evaporated as investors lock in profits on areas of the market that have served them well in recent months and years, such as shares in Rolls-Royce and Lloyds, and gold. The precious metal was also dragged down by a strengthening US dollar which makes gold more expensive for buyers in other currencies.

“The FTSE 100 fell 1.2% to 10,160, with only a handful of stocks in positive territory including Shell and BP as two beneficiaries of the sharp rise in the oil price. Their earnings could soar in the near-term.

“One might have expected all types of commodity producers to be in demand if inflation picks up. When inflation goes up, investors often seek exposure to hard assets as they tend to retain value better than financial assets in such an environment. However, miners were among the biggest losers on the market on Monday.

“The spike in oil prices means mining companies face a sharp rise in costs to run their operations. There is also increased uncertainty around global economic activity because the Iran conflict puts a question mark over demand levels for metals and minerals near-term.

“Investors often turn to defensive-style industries in the face of uncertainty, such as grocers and tobacco producers. There are elements of that trend now at play, but these stocks are only relative winners, not absolute ones. For example, Imperial Brands was down 0.2% which is nowhere near as bad as the broader market, but still in negative territory. While Tesco fared better with a 0.2% rise, Sainsbury’s was down 1.1%. Events in Iran are moving so fast that many investors might simply want to sit on the sidelines for now.”

OIL MARKET

“Oil hadn’t traded above $100 per barrel since the months following the Russian invasion of Ukraine but in a matter of minutes on Monday the price had shot up to close to $120 per barrel.

“Having built steadily through last week, the continued escalation of hostilities in Iran and a sustained blockage of the Strait of Hormuz caused a blowout which saw prices move higher. The G7 is reported to be discussing a joint release of petroleum reserves this morning which has helped bring prices back a touch from their highs.

“Oil was below $60 per barrel as recently as January, having slowly eased as global energy markets absorbed the impact of sanctions on Russian assets.

“The surge in both oil and natural gas is a dramatic shift for the world economy to adjust to. After all, rising oil prices are known as a tax on growth.

“If prices were to follow the same trajectory as they did from 2022, with an initial spike followed by a long and gradual moderation of prices, then the impact could be long lasting in terms of inflation and the implications for interest rates.

“Much depends on how much longer the conflict lasts and when key infrastructure and shipping routes can be brought back to normality. For as long as that seems a distant prospect, the upwards pressure on energy markets is likely to continue.

“On the basis that the cure for high prices is high prices, eventually demand may drop, other production might ramp up to fill the gap, and the situation might stabilise. However, this now seems set to be a drawn-out affair.

“The surge in energy prices is good news for oil producers. It is bad news for importers of energy – which is why Asian countries, which are heavily reliant on imported gas and oil, have seen some of the biggest market falls.”

CLARKSON

“The global shipping market is in focus in a way it probably hasn’t been since Covid, making now an interesting time for broker Clarkson to announce its latest results.

“Clarkson works as an intermediary between ship owners and charterers – those looking to move cargo. That puts it right at the centre of several moving parts geopolitically, including tariffs and global conflicts.

“The company’s ability to navigate increasingly complex and fractured waters is reflected in the company’s 23rd consecutive increase in the dividend.

“Arguably these complexities make its services, which also include financing and data insights, even more crucial and Clarkson’s order book is moving higher at a rate of knots.”

NIGEL FARAGE / BITCOIN / STACK

“Nigel Farage has invested £215,000 in a buy-and-build company which plans to invest in bitcoin while it looks for acquisition targets.

“Stack is chaired by former chancellor Kwasi Kwarteng and having an association with two well-known political figures might help to boost the company’s profile. That is important given Stack has limited resources and may need to undertake multiple fundraisings if it wants to get the business off the ground.

“Having grand plans to build a portfolio of high-quality, cash-generative companies is one thing, executing on those plans and making them happen is another.”

Advice on IHT planning can be remarkably effective, especially for those with larger estates, but there are reports that people are increasingly turning to GenAI for financial advice and guidance.

I asked one of the well-known AI tools a few financial questions to see what came back. I found that if you ask whether you should buy a particular stock, you will get a warning that buying shares is a regulated activity and if GenAI gave a personalised investment recommendation that might expose you to financial harm. GenAI is clearly well trained on what constitutes regulated advice.

I found that GenAI also knows what constitutes guidance, which puts it in a more informed position than most people, who have little knowledge of the advice/guidance boundary. Ask GenAI what you can do to avoid IHT on a £400,000 pension pot post-2027 and it will respond with several suggestions, not all of which are fully explained.

As an example, GenAI suggests that pension benefits held in a discretionary trust with a non-legally binding nomination are less likely to fall within IHT. This presumes that the trustees will make a judgement on whether to follow a nomination, or not, based on tax efficiency. While this is possible, it’s questionable whether it’s probable, and there is no initial explanation as to how it might work. As most pension nominations are non-binding the potential for a scheme member to assume they needn’t worry about IHT is a real risk.

The other solution missing from the list provided in my test, is to seek regulated advice. GenAI points out that the list of potential actions “does not constitute personal financial advice, they’re general planning options supported by published guidance”, but fails to recommend seeking regulated advice as an action in itself.

Most of what was on my GenAI to- do list made sense, it was a helpful starting point in understanding the issues and some of the simpler solutions but, as is often the way with Gen AI, a seemingly complete list of well-worded bullet points can give the impression that AI has all the (correct) answers.

While we can tell people that GenAI should be a co-pilot, not an autopilot it’s clear that GenAI will be used as a source of guidance in the absence of more reliable sources of information. It’s something for everyone involved in running a scheme to consider.

The IHT change is an example of a development that will concern far more people than it will impact. The biggest issue for most people is having saved enough to last them through their retirement, and most people will live to enjoy the full benefit of their pension saving. This will not prevent people from worrying about the consequences for their children if the worst were to happen, however. Many will want to ensure their children get the maximum benefit from an inheritance.

Schemes should consider communication well in advance of next April, to allow people time to plan or put protections in place. We are likely to see increased attention on this as we get closer to April 2027 and people may appreciate some human reassurance, guidance and advice before then.

That said, it’s worth keeping the broader move in perspective - oil has still jumped nearly 20% this week, putting it on track for its biggest weekly advance since February 2022. Higher prices tend to feed through to consumers almost immediately via rising petrol costs, which in turn risks reigniting inflation pressures just as central banks were hoping for some relief. Still, stock markets have been reasonably robust considering the events, a signal that investors are siding with the transitory narrative for now, a view we share.

Gold is trading up to around $5,110 per ounce this morning but is still on track for its first weekly decline in five weeks - something that may come as a surprise given the ongoing geopolitical tensions. While the Middle East conflict has boosted demand for safe-haven assets, the resulting surge in oil prices has stoked fresh inflation concerns, prompting traders to dial back expectations for rate cuts. Markets are now pricing in just one US cut this year, down from two earlier in the week, after surging oil prices and a run of solid US data pointed to continued economic resilience. Rate expectations often don’t get the attention they deserve, but they’ve quietly been one of the biggest forces at play this week.

Chip stocks could face a fresh bout of policy uncertainty after reports that the US is toying with the idea of new export controls on advanced AI chips - an unwelcome twist for the sector, especially after this administration scrapped Biden-era “AI diffusion” rules last year. The proposed framework could require government approval for shipments of AI chips to countries outside the US, effectively giving Washington a gatekeeper role in global semiconductor sales. Even so, this isn’t unfamiliar territory for chipmakers, who have navigated multiple rounds of export restrictions in recent years - meaning while it may add some administrative friction, it’s unlikely to materially dent financials if it comes to pass.”

Endeavour Mining, the Africa-focussed gold producer, has reported its annual results, continuing a strong track record of meeting guidance. A 10% increase in production and 38% in average prices received, more than offset an 18% hike in unit costs. That saw net earnings race ahead by 244% to $782mn. This strength has been reflected in nearly a 200% gain in the company’s market value over the last 12 months, and the shares have given back 2% at today's open. With production in 2026 expected to remain broadly stable and unit costs still heading up, shareholders will need pricing to stay strong to generate further earnings growth. But in times of feast, management is showing a balanced approach to capital allocation. Net debt is now di minimis, and Endeavour’s upped its promises on shareholder payouts based on the prevailing gold price. There’s also an ambitious exploration target in place of 12-15 million ounces of discoveries by the end of the decade.

Gold prices continue to recover from losses earlier in the week. However, there is likely to be further volatility ahead. The key driver for now is interest rate expectations with markets pushing their bets for a further rate cut in the US all the way out to September.

After a positive day yesterday, with both S&P 500 and NASDAQ markets up, falling US stock futures suggest that yesterday’s rebound may be short-lived. Weekly jobs data will deliver its usual double-edged message today. Initial jobless claims are expected to rise slightly to 215,000 this week, but that’s still lower than recent averages. On the one hand, that shows resilience in the economy, but with inflationary concerns being stoked by higher oil prices, the case for imminent reductions in Fed rates is far from cut and dry.

Brent Crude prices are up around 3% to around $84 per barrel, driven by continuing disruption in the Persian Gulf, and China’s order to suspend exports of refined products such as diesel and gasoline. However, a higher than expected 3.5 million barrel increase in US crude inventories underlines the potential for prices to quickly pull back if stability returns to the Middle East.

In advance of the introduction of guided retirement duty in the Pension Schemes Bill, TPR’s analysis of the occupational DC market published today, Thursday 5 March, reveals larger schemes are leading the way in supporting members when they come to retire.

The shift towards drawdown being offered in-scheme is largely driven by the growth of master trusts, which have the scale and governance to make it a reality.

Joey Patel, TPR Director of Policy said: “These findings herald a transformation in the DC workplace pensions landscape ahead of guided retirement duty, with millions of savers now able to access in-scheme retirement options. This is just the start, however. Too many members in smaller schemes are left without support when they reach retirement. This is not good enough. We urge trustees to start getting ready for the Pensions Schemes Bill by reviewing their offer and starting to design their decumulation products. If you are not able to guide savers into the right retirement options for them, our message is clear: you should consider consolidation into a scheme that can offer value for money solutions."

As the guided retirement duty takes shape under the Pension Schemes Bill, TPR is working with government and industry to ensure trustees have the clarity and support they need.

In the UK, concerns around extreme disruption are even more pronounced than the global average. A significant 69% of respondents identified a global internet outage caused by a major cyberattack or technology failure as the country’s most feared Black Swan event, far higher than 47% globally. This was followed by global supply chain paralysis, cited by 46% of UK respondents, reflecting ongoing worries about geopolitical conflict and its impact on the movement of goods and raw materials. The sudden collapse of a major financial institution ranked third, underscoring persistent anxieties about systemic financial stability in an increasingly volatile global environment.

Allianz Commercial CEO Thomas Lillelund comments: “Although Black Swan events are not seen to be immediately likely, these rare, high-impact scenarios are perceived as increasingly plausible and should be considered by executive boards given their potential consequences. Growing interconnectivity across both physical and digital supply chains means disruptions now cascade much faster and can turn into major losses. In today’s fragmented geopolitical environment, companies must double down on resilience and integrated risk management to ride out the next perfect storm.”

Geopolitics is a key driver for Black Swans
Given the current geopolitical environment, it is no surprise that supply chain paralysis resulting from a geopolitical conflict is regarded as the most plausible Black Swan scenario. The threats of tariffs, trade wars and protectionism, as well as disruption to supply chains and shipping caused by regional conflicts in the Middle East and Russia / Ukraine are at the top of every board agenda. Allianz Research estimates that cumulative GDP losses over a two-year horizon triggered by a global supply chain disruption on the scale of the war in Ukraine could total US$1.5trn. In fact, political-related risks stand out as a leading potential trigger for Black Swan events, according to respondents. Mass social unrest and political instability is regarded as the fourth most plausible scenario globally (29%) and is a top three risk in the Americas (31%) and Africa and the Middle East (41%) regions, as well as in France (42%), for example. A sudden collapse of a major financial institution or a sovereign debt crisis, leading to a global liquidity crisis and severe market volatility ranks third (30%).

Interconnectivity and interdependency of both physical and digital supply chains are potentially increasing vulnerability at a time of geopolitical uncertainty, rapid advances in technology, and climate change. Businesses and global supply chains are also more vulnerable to Black Swan events due to growing concentrations of economic activity reliant on a limited number of critical suppliers and products in areas like AI and digital services, semiconductors, rare earth processors and transition technologies.

Company size influences risk perception
Global supply chain paralysis due to a geopolitical conflict halting the movement of goods and raw materials ranks top for both large (>US$500mn annual revenue, 55% of responses) and mid-sized companies (US$100mn+ to US$500mn, 52%). In contrast, smaller companies (

“Awareness of Black Swans and the need to build resilience has increased in recent years, but businesses can never fully prepare for rare high impact events such as a global outage or an unforeseen climate-related catastrophe. Building organizational agility, fostering a risk-aware culture and developing scalable response plans for a range of scenarios remain the most practical steps to best prepare for Black Swan events. Insurers can play a critical role in helping businesses strengthen their resilience in areas such as cyber risk and support more informed decisions when assessing and selecting critical suppliers,” says Michael Bruch, Global Head of Risk Consulting Advisory Services, Allianz Commercial.

The top global Black Swan scenarios

“Escalating conflict in the Middle East saw market losses across the globe yesterday – and early trading suggests a mixed picture today.

Oil prices reached just shy of $85 a barrel yesterday as trade through the Strait of Hormuz – through which 20% of global flow moves daily – halted entirely. Gas prices also rose sharply. Iraq announced plans to pause production due to the disruption. Equity and bond markets priced in the impact of a potential supply shock, anticipated to hike energy costs, stoke inflation and force higher interest rate policy. Gold fell 4% as higher Treasury yields offered haven seekers an alternative home.

Europe felt the brunt of investor concern, with Germany’s DAX down 3.44%, France’s CAC 40 falling 3.46% and the FTSE 100 fell 2.75%. The US began trading with similar negativity but markets were granted reprieve in the form of President Donald Trump who pledged insurance guarantees and escorts for tankers using Hormuz. The S&P 500 therefore closed down a more muted 0.94% and NASDAQ index fell just 1.02%. The brent crude oil price fell back to $80 on the news.

Today’s trading in Asia has not picked up the optimistic baton – with markets down across the region. Japan’s Nikkei is down 3.73% at the time of writing, while China’s Shanghai Composite is down 1.29% and Hong Kong’s Hang Seng has fallen 2.78%. South Korea’s KOSPI index is in technical correction territory, down 12%.

Losses are driven by AI-names in a reversal of market trends that have dominated in recent years, and US dollar strength has also weighed.

But futures for Europe suggest a more robust open – the FTSE 100 is currently on track to open flat, and futures for France, Italy and Germany are edging into positive territory. The old-economy nature of the region, a headwind in recent years, is proving a boon. This underlines the importance of portfolio diversification in times of market stress.

A number of oil exporters including Saudi Arabia, and indeed importers such as China, also have reserves outside of the conflict zone which can provide some buffer, but are finite. Renewable energy sources will also help at the margin. But Hormuz resuming usual trade is essential for asset price normalisation.

Some investors are questioning whether this triggers a financial crisis; a toxic combination of asset prices collapsing coupled with recession. Fear is understandable – the events are alarming and upsetting, and from a markets point of view, the VIX volatility index hit 28 yesterday, above the 24 level which piques our interest. But it is important to stress that a prolonged bear market is not our base case scenario. The US military is a global strength, and the President has made it clear restoring global energy supply is a priority.

The downward pressure on stocks is likely to continue until this crucial trade route is made safe. Once secured however, we expect markets to return to optimism – with the volatility we have come to anticipate as the norm under a Trump presidency. The most sensible investment strategy is therefore to sit tight. Well diversified portfolios, with exposure to different asset classes, geographies and styles will be most robust against uncertainty.

Against a troubled backdrop, the Chancellor was keen to celebrate her successes; the independent Office of Budget Responsibility’s progress report that credited the Labour Party as delivering lower borrowing, higher growth economic growth for 2027 and 2028, and lower inflation for the UK. Reeves glossed over the growth downgrade for 2026 – lowered to 1.1% from 1.4%.

On that reasonably positive data set, you’d have expected gilt yields to dip, but markets were listening less to what is happening in the House of Commons and more on the war in the Middle East. Expectations that higher oil prices will flow through to re-inflation have sent yields higher, with the 10-year gilt yield reaching 4.53% in intraday trading. The market slashed expectations for an interest rate cut later this month, and some forecasters adjusted their outlook to just one cut of 25bp through 2026. We think is overly pessimistic but understand investors’ caution.”

In the Defined Contribution (DC) market, this is critical as consolidation accelerates to create a landscape built around a small number of large-scale ‘megafunds’. To deliver consistently for members, trustee boards must adopt clearer risk appetite statements, FTSE-style committee structures, independent oversight of illiquids and decumulation pathways and vastly enhanced operational-resilience and cyber-governance disciplines.

As structural conflicts of interest become more significant as the market consolidates, schemes may benefit from greater structural safeguards where decision making concentration is higher. Broadstone supports measures such as independent procurement for material mandates, comply-or-explain rotation/retender cycles for key advisers and documented multi-party review for material Professional Corporate Sole Trustee decisions (for example, default investment or administrator selection).

A consolidated sector also requires regulators to act earlier and more decisively where governance weaknesses could affect large numbers of savers. Enhanced powers to direct professional trustee appointments, require independent audits and secure more timely reporting will support better, safer outcomes.

On other areas covered by the consultation, Broadstone:

supports mandatory minimum standards for administrators and ISPs, registration with TPR, strengthened oversight powers, and orderly exit frameworks to ensure member protection;

believes policy should support both dominant end-game paths for Defined Benefit (DB) schemes, and include mandatory pre-buyout data audits, clear responsibility allocation between trustees, administrators and insurers, and robust evidence packs are essential to ensure members receive the right benefits at the right time;

supports the continued professionalisation of trusteeship and professional trustees should meet statutory accreditation, competence, CPD, capacity and independence standards.

David Brooks, Head of Policy at Broadstone, commented: “Overall, we advocate a regulatory and governance framework that reflects the scale, complexity and interconnectedness of the future pensions system.

“This will require institution-grade governance for DC megafunds, stronger readiness for DB transactions, and system-wide improvements in conflict management, data assurance and administrator oversight.

“It is encouraging that DWP is proactively pursuing measures that could drive a step change in the standards across the pensions industry. Ultimately, this is critical to developing a system that will deliver the best possible outcomes and experience for savers helping to build trust.”

TPR’s Director of Evidence and External Risk Sarah Tune said: “The step change in DB funding means trustees and employers must actively consider their end-game strategy. Whether that’s running-on, consolidating via a superfund, or buying out, the decisions you make today will shape the future for your members. Stay ahead of the curve - because in this changing landscape, standing still is not an option.

“We’ve produced this new report as part of our intent to be more proactive and forward-looking in publishing regular analysis of the pensions landscape, across both defined benefit and defined contribution schemes”

This is the year insurers move decisively beyond isolated experiments to operationalise AI across the entire business. Success is now defined by a powerful, simple principle: AI must drive the sheer volume, while human experts are freed to conquer the complexity.

The solution to this volume-based problem is intelligent document processing (IDP), which is now table stakes for any forward-looking insurer. IDP can ingest submissions, claims documents and supporting evidence in real time, extracting relevant data while preserving full audit trails. It’s also now moving beyond front-end intake into underwriting, claims adjudication and compliance.

With information flowing seamlessly into underwriting and claims workflows, experts can spend less time searching for data and more time applying decisioning.

Routine, low-complexity products like bicycle or basic travel insurance lend themselves to high levels of automation. In these cases, AI can assess eligibility and price risk, and process straightforward claims with minimal human intervention.

However, that approach does not translate to complex risks such as large industrial sites or bespoke commercial programmes. These risks demand expert decisioning, contextual understanding and experience. Here, AI’s role is not to replace decision-makers, but to accelerate analysis by surfacing relevant insights, flagging anomalies and coordinating workflows across teams.

We are already seeing this balance achieved through connected underwriting and connected claims models, where AI supports human decision-making without obscuring accountability. The result is faster, more consistent decisions, without sacrificing control.

Insurance profitability has always been tightly linked to governance, given the industry’s regulatory intensity. At the same time, insurers are under pressure to deliver hyper-digital, highly personalised experiences at scale. Those pressures only intensify as AI becomes embedded in core workflows.

Regulatory scrutiny of AI is increasing globally, with regulators raising expectations around transparency and control. Notably in August of this year the EU AI Act takes effect in Europe. Insurers need auditable AI decisions, full decision lineage and clear ownership models. Recent headlines involving opaque AI systems denying claims have reinforced a simple truth: governance is a trust issue for the whole industry.

In this environment, strong governance becomes a competitive differentiator, enabling insurers to adopt AI sustainably and at scale, rather than being slowed by risk or regulatory uncertainty.

As AI investment accelerates, cultural change must keep pace. While many leaders talk about agile and iterative development, a surprising number of insurers still operate in a waterfall mindset. Lengthy requirements documents are handed over to IT, only for solutions to emerge months later that technically meet specifications but fail to address real business needs or human problems.

For AI to deliver value at scale, that pattern must change. Business teams need to trust IT to deliver iteratively, and IT needs clear priorities rather than exhaustive upfront specifications. Insurers should embed AI into day-to-day workflows through continuous improvement rather than relying on one-off transformation programmes.

In 2026, insurers that strike that balance – of automation for volume, expertise for complexity, with governance always a central principle – will make the shift from isolated AI tools to enterprise-wide capability. That is how we as an industry make good on AI’s promise.

During the last year the landscape has changed. The "State of the World" in 2025 presents a sobering reality: the average increase in global temperatures has now exceeded 1.5°C and the consensus following COP30 in Belém is that the risk of a "disorderly transition" has heightened.

The insurance market must now navigate a dual challenge: intensifying physical risks and an evolving transition risk profile. This includes, for example, the PRA mandating that climate risks (including climate litigation risk) should be embedded into governance and risk appetites before June 2026.

Paul Davenport, Finance & Risk Director at the LMA, said: “For over three centuries, the Lloyd’s market has been the global laboratory for risk. Lloyd’s managing agents are already underwriting the climate transition. We are not just observing; we are actively supporting our clients across different sectors and industries as they navigate decarbonisation and adaptation.”

Josh Holbrook, Director, Sustainability at KPMG UK, who led the team doing the research, said: “The world has changed since we published our first report in October 2024. This second iteration provides an updated viewpoint across the transition sectors that are also key to Lloyd’s underwriters. In doing so, it provides deeper insights into the implications for underwriters, both in terms of opportunities and risks arising from the transition.”

What has changed in 17 months?
The report highlights four key areas of change since the first report:

Energy system dynamics
Global energy demand continues to rise sharply, driven by population and GDP growth alongside accelerating electrification, cooling demand, and the explosive growth of AI and data centres. Under the International Energy Agency’s World Energy Outlook 2025 Current Policies Scenario (CPS), oil demand is not projected to peak before 2050 and could reach 113 million barrels per day, requiring new upstream projects. Unabated natural gas usage is projected to remain stable into the 2030s, while demand for coal is projected to decline more slowly than anticipated unless government climate and energy policies tighten.

Continued demand for oil and gas could decrease stranded asset risk for insurers in the short-term compared to last year’s iteration of the CPS. However, it also signifies slower emissions reduction, contributing to higher long-term physical climate risk. At the same time, slow energy efficiency gains, and an electricity grid that is not keeping pace with the rapid expansion of renewables, create stress and instability in the power system. This makes the assets insurers cover more prone to interruptions, malfunctions and performance issues, increasing the likelihood of operational and reliability related losses.

Technology and AI
AI is emerging as both an enabler of the energy transition and a driver of new systemic risks. AI applications such as grid forecasting, predictive maintenance, and smart-building optimisation, help the energy system run more smoothly by improving reliability and accelerating renewable energy integration. However, the same technologies are fuelling explosive growth in electricity demand, especially because data centres need huge amounts of power to run.

Global data centre electricity consumption is projected to more than double to around 945 TWh by 2030 with the US, Europe and China, which account for 85% of current load, driving most of this growth. While the share of renewables in data centre supply is rising, natural gas and nuclear remain critical for capacity and reliability as grids struggle to keep pace with demand.

For insurers, there are key opportunities for AI models to simulate future scenarios, enhance the accuracy of risk estimation, drive better pricing models and identify false claims more effectively. However, significant risks and challenges remain around data quality and protection, regulatory uncertainty as well as emerging AI-related insurance coverage risks.

Adaptation
At the same time, physical climate risks, such as heatwaves, floods and wildfires, are intensifying. Observed extremes are occurring more frequently and with greater severity, with the World Meteorological Organisation confirming sharp increases in heatwaves, floods, droughts, wildfires and other destructive extremes as global warming increases.

Adaptation to climate change is no longer optional; it must sit alongside decarbonisation as a core strategic priority. The likelihood of compound shocks, such as simultaneous droughts and crop failures, is increasing, with cascading effects on global trade and financial systems.

Regulatory and policy changes since October 2024
Affordability has become a defining issue reshaping national energy policies. High electricity prices and cost-of-living pressures in advanced economies have eroded public support for transition measures, leading some governments to roll back or delay investments.

As a result, global climate policy across all regions has shifted since 2024 towards implementation and competitiveness, with major economies tightening disclosure standards, adjusting transition incentives and recalibrating sectoral targets. These changes create opportunity and risk, expanding demand for insurance in renewables, grids and adaptation projects, while increasing the risk of compliance failures, stranded assets, and transition uncertainty.

Why this is important for insurers?

Paul explains: “The insurance industry, traditionally viewed through the lens of risk management and protection, is a critical partner in this transition. Without insurance, businesses will struggle to achieve their transition goals or build resilience against the impacts of a changing climate.”

Josh added: “It’s only by understanding companies’ transition pathways in more detail that insurers will truly be able to assist and in doing so, realise the opportunities, as well as risks, of transition.”

Paul concluded: “Lloyd’s will continue to be the market to which these complex and emerging risks come for solutions. In the years ahead, the LMA and KPMG expect to continue monitoring and reporting on shifts that occur in government policies, regulation, and in the portfolios and risk profiles of Lloyd’s market participants.”

Full report Underwriting the Transition

“We would not want to see a change to the balance of power impacting employer appointments of trustees. However, we suggest that consideration should be given to a more formal process for appointment – including notification to the Pension Regulator where a professional trustee or Professional Corporate Sole Trustee (PCST) is being appointed and/or replaced.”

ACA Pension Schemes Committee Chair, Peter Williams, added: “We have a strong view that the requirements for lay trustees should not be raised, as this would make it even more difficult to attract candidates to these key positions. It is the trustee board as a whole that needs to have the appropriate skills. We think diversity of trustee boards is very important and lay trustees, including member nominated trustees, play an important role in bringing a range of experience and perspectives to trustee decision making.”

The ACA supports maintaining current skill requirements at the board level rather than for each individual lay trustee. The response also commends the guidance provided by the Pensions Regulator for lay trustees and advocates for its continued availability.

The ACA's detailed comments on the consultation questions are provided in an appendix to their response.

As we shared in yesterday’s market report, there are echoes of the 1979 Iranian revolution, which not only caused a significant shift in geopolitics and re-configuration of cross-globe allies and partnerships, but also resulted in an oil crisis which saw the price of crude double over the course of a year, higher global inflation and slower economic growth. It will be this stagflation risk that equity and bond markets are most sensitive to, but the dynamics of the oil market have evolved significantly over the past 45 years. Crucially, while oil prices may be higher now, consensus is that this disruption is transitory – and so too will the impact be on wider asset classes. In the event of an effective transition of power – and end to the fighting – oil prices are expected to return to $65 a barrel within weeks, and therefore the likelihood of a global growth shock is minimal.”

Chris Beauchamp, Chief Market Analyst at IG: "You have to wonder whether the chancellor has checked a data terminal recently. Today’s note that inflation is falling faster than expected is, like all plans, unlikely to survive first contact with the enemy. UK gas prices are rising at their fastest pace in recent history, and much faster than in 2022. The government might be optimistic, but consumers are already beginning to fret.”

Commenting, Faye Church, Senior Planning Director at Rathbones, says: “Spring Statements are built on the known knowns and the known unknowns. The difficulty is that geopolitics has a habit of turning yesterday’s unknowns into today’s shocks - and the escalating situation in Iran has already raised serious questions about whether the new forecasts were out of date almost as soon as they landed. The Statement itself was intentionally unexciting. In volatile times, predictability is a policy tool in its own right. The aim was not to surprise markets, but to anchor expectations - even if events since then have already complicated the picture. As expected, the set piece did not deliver sweeping tax changes or major spending commitments. Notably, the Chancellor offered only silence on pensions, with no policy changes or updates unveiled - a reprieve of sorts after the scale of uncertainty surrounding the pensions regime in the run up to last year’s Budget. However, events in the Middle East have complicated the fiscal picture. For most households, geopolitics can feel remote - until it shows up in oil prices — at the petrol pump, on energy bills, and in the weekly shop. A sustained spike in oil can ripple through the economy via higher fuel and transport costs, feeding into broader inflation and potentially keeping interest rates higher for longer than markets would like. That matters because it influences the pace of rate cuts and, in turn, mortgage rates, savings returns and the cost of borrowing. Geopolitical shocks also rarely arrive neatly. They tend to push governments into reactive choices — whether that means higher defence spending, fresh support to head off another inflation flare-up, or renewed pressure to keep energy costs contained. Any of these could quickly reshuffle fiscal priorities, particularly at a time when the public finances are already tight. One saving grace is that fiscal headroom has increased, which could provide some scope to help fund any reactive measures. It’s also worth remembering that economic forecasts are seldom right - they are frameworks, not promises. The best response for households is not to try to predict the next twist in global events, but to build resilience into their own finances. That means stress testing budgets, maintaining a cash buffer where possible, and keeping investments diversified rather than reacting to every headline.”

Standard Life champions the belief that everyone’s journey to and through retirement can be better. For more than 200 years, Standard Life has been standing beside its customers, to help them plan and prepare for their financial futures.

The change to Standard Life plc recognises the progress made in recent years by Phoenix Group to simplify the business and enables the Group’s vision to be the UK’s leading retirement savings and income business.

The Group will continue to lead the industry, by advocating for better retirements and convening to drive meaningful change to help customers achieve greater financial security.

To mark this change, Standard Life has set a new target to help three million more customers over the next ten years take action towards a better retirement. To meet this commitment, the Group will provide support and solutions designed to ensure more people are on track for sufficient pension savings and more people are financially secure in later life. Standard Life will evidence this by tracking improvement in two customer outcomes: more people are engaged in planning for their retirement, and more people are supported to make better decisions when accessing their pension.

Andy Briggs, Standard Life plc CEO, said: “For more than 200 years, Standard Life has stood beside its customers, helping them plan and prepare for their long-term financial futures. Today, as Standard Life plc, we are proud to manage £300 billion in assets on behalf of 12 million customers.

“Our purpose is helping people secure a life of possibilities, and I am proud to announce our new target, which embodies our belief that everyone’s journey to and through retirement can be better. Over the next ten years, we will help three million more customers take action to achieve better retirement outcomes.”

An extensive consumer brand campaign ‘For the life we live’ has also been launched - a national multi-media campaign featuring TV, radio, newsprint, digital and social advertising. It will run for ten weeks with the aim of strengthening the Standard Life brand at key customer decision points in people’s journey to and through retirement and helping inspire customers to engage with their financial futures.

Customer brands within the Group, including SunLife, Phoenix Life and ReAssure, will continue to invest in customer service and operate as normal. This move will see no change as part of the structure of the Group, or the legal entity.

Andy Briggs, Standard Life plc CEO, concluded: “The move to Standard Life plc supports our vision to be the UK’s leading retirement savings and income business, and demonstrates our commitment to helping customers achieve better outcomes and greater financial security in later life. We want Standard Life to be the business that people trust to guide their retirement journey."

Higher energy prices pile costs onto companies, and there appears to be no immediate escape valve for prices. Iran has already cut off the Strait of Hormuz to shipping companies, an essential passage for around one-fifth of the world’s oil and gas. While some Iranian and Chinese ships are reportedly still passing through, attacks on British and US tankers are a stark warning of the danger of taking this route. The effective closure of the Strait constrains crucial supplies from the Gulf, which is why prices have risen so sharply.

It will come as a blow to households, who will see prices at the pumps rise significantly. It also adds another layer of uncertainty over future interest rate cuts, given that higher fuel prices will put upward pressure on headline inflation.

Precious metals prices have ratcheted up again, with gold and silver increasingly sought after in these turbulent times. Gold has reached a one-month high, after recording its seventh consecutive monthly gain in February - the best winning streak since 1973. Back then, a severe oil shock led to a flight to safe havens. While oil prices have increased sharply, this is not yet mirroring the 1970s surge, when prices effectively quadrupled in just a few months after Gulf countries retaliated against US support for Israel in the Yom Kippur War.

However, with tensions escalating and uncertainty so high, it is far from clear how this current conflict will evolve, and prices could climb even higher. This time around, other worries are also colliding to push up precious metals prices, including high debt levels, concerns over the Federal Reserve’s independence, and questions about the sustainability of the artificial intelligence boom.

The FTSE 100 has fallen back in early trade, as the shock of war hits investor sentiment. Airline stocks have been sideswiped by the conflict, with the closure of airspace across large swathes of the Gulf causing significant disruption. Not only will the immediate chaos be costly, with so many stranded passengers and route closures, but the dent to confidence among the travelling public may also hit demand for holidays and business travel elsewhere.

Financial stocks are also sharply lower, as investors worry about the implications of prolonged fighting for economies, the potential drag on demand for borrowing, and the increased risk of loans turning bad.

However, London’s blue-chip index looks set to hold up better than some of its peers due to the resilience of its constituents in the face of heightened global tensions. Mining stocks are benefiting from the surge in precious metals prices, while oil giants BP and Shell have also risen sharply as oil prices climb. Demand for defence stocks has increased again as military spending looks set to deepen further.

With risk-off sentiment taking hold, the S&P 500 is expected to open 1.5% lower, with investors also seeking cover on Wall Street. Bitcoin is languishing at levels not seen for around 17 months, as a chill continues to pervade the crypto market amid heightened global uncertainty.''

Manogna Vangari, Insurance Analyst at GlobalData, comments: “The APAC market remains highly concentrated. Indeed, its five largest reinsurers captured 71.7% of total premiums in 2024. Among them, China Reinsurance Company continued as market leader, albeit with a slight decline: its share fell from 28.7% in 2023 to 28.3% in 2024. Meanwhile, other top entities experienced modest shifts: PICC Reinsurance’s share decreased by about 0.4 percentage points (pp); Korean Reinsurance (Korean Re) declined by around 1.1pp; whereas the General Insurance Corporation of India (GIC Re) and Sompo Holdings gained approximately 0.9pp and 0.7pp, respectively.”

Looking beyond the top five, four of the top 10 reinsurance groups are based in Japan (namely Sompo Holdings, MS&AD Insurance Group, Tokio Marine & Nichido Fire Insurance, and Toa Reinsurance). The remaining six include two from China (including Hong Kong (China SAR)), one from India, and one from South Korea. Notably, among these leading groups, MS&AD Insurance Group posted the strongest premium growth during the 2020–2024 period, at a CAGR of 22.6%, followed by PICC Reinsurance at 16%.

Vangari adds: “Regarding geographic business mix, most of the reinsurance companies are heavily dependent on their global operations. However, China Reinsurance Company derives 83.5% of its business from the APAC region, while the remainder comes from its international operations, which include its CNIP and Chaucer businesses. In contrast, Korean Re holds only 25.8% of its business from APAC, while 74.2% comes from global markets.”

Turning to recent challenges, several catastrophic events have placed stress on property and casualty portfolios in the APAC reinsurance market. For example, in March 2025, a magnitude-7.7 earthquake struck Myanmar, and severe flooding affected China, India, and several ASEAN nations. In addition, Hong Kong (China SAR) suffered a fatal apartment building fire in November 2025. Similarly, Typhoon Wutip and flooding in Beijing later in 2025 further underscored persistent protection gaps and exposed accumulation risks, thereby raising questions about pricing adequacy. Alongside those natural catastrophe losses, the mid-2025 Air India Flight AI-171 Boeing-787-8 crash triggered about $475 million in claims, according to GIC Re, intensifying reinsurance pricing and aviation risk scrutiny.

In response to mounting losses, reinsurers are increasingly offering parametric reinsurance and catastrophe bonds (insurance-linked securities) to help both governments and insurers manage risk, particularly where traditional indemnity cover has gaps.

Vangari continues: “APAC reinsurers are also increasingly leveraging AI models that synthesize real-time environmental, geographic, and exposure data. These models support catastrophe modelling and risk scoring by integrating inputs such as up-to-date satellite imagery and geospatial mapping, which help reinsurers access risk across property, marine, and energy lines. This enhances loss prediction and supports treaty placements that more accurately reflect localized exposure.”

AI agents automate labor-intensive tasks—such as treaty pricing, bordereaux reconciliation, submission parsing, and clause extraction—lowering error rates and accelerating processes so specialists can concentrate on judgment-intensive work.

Major reinsurers in APAC plan to embed these tools across underwriting, claims, and policy administration by 2026, aiming for cost savings, faster decision-making, and better alignment between exposure, pricing, and reserve setting.

Vangari concludes: “Emerging trends in the region signal cautious but constructive progress for APAC reinsurers. Factors such as innovation in pricing, analytics, and automation by reinsurers is becoming essential for maintaining margin, managing risk exposure, and aligning business processes with evolving regulatory, operational, and environmental realities.”

US markets took a step back yesterday, with the S&P 500 falling 0.54% and heavier losses across the tech-focused Nasdaq. The standout move came from Nvidia, which fell 5.5% despite delivering blockbuster results. This looks less like bad news and more like sky-high expectations colliding with some classic “buy the rumour, sell the news” behaviour. Around earnings season, short-term traders, hedge funds, and fast-moving algorithms tend to dominate the action, creating plenty of noise. Long-term investors are usually better off looking through this kind of volatility. Nvidia’s slide also weighed on much of the semiconductor sector, dragging chip stocks lower across the board. Software stocks enjoyed a rare moment in the sun as some of the recent rotation out of that space unwound slightly – nothing dramatic, but another subtle signal that the bottom may have been found.

US fintech giant Block was in focus after announcing a hefty 40% cut to headcount, a move that immediately unlocked major guidance upgrades as more work is shifted to AI at a lower cost. It’s reignited the debate around AI-driven job displacement – and that concern is very real. But there’s another angle worth keeping in mind. CEO Jack Dorsey has a reputation for running organisations a little on the heavy side, and history offers a clue here: when Elon Musk took over Twitter in 2022, he slashed headcount by around 80% and the platform kept running. In Block’s case, this looks like a mix of AI efficiency gains and an overdue clean-up of corporate bloat.

Oil prices steadied, with Brent holding just below $71 a barrel after a choppy session. Ongoing US-Iran nuclear talks offered a hint of progress, but mixed signals from both sides and lingering geopolitical tensions kept traders cautious. Attention now turns to Sunday’s OPEC+ supply meeting, with worries about an emerging oil glut hanging over the market. Taken together, it leaves oil heading for a softer week, with uncertainty doing most of the price-setting.”

HMRC established the large business tax directorate to ensure the UK’s largest business groups comply with the tax rules. Around two fifths of the UK’s tax revenues come through large businesses, equivalent to £337 billion in 2024-25. This includes taxes that large businesses pay directly and those they pay on behalf of their employees and customers.

HMRC takes a more hands-on approach than with other taxpayers due to the complex nature of large businesses and the scale of the revenue collected. The large business directorate has proven to be a success, with customer compliance managers assigned to each business establishing co-operative and effective relationships. The directorate has doubled compliance yield (tax revenue collected or protected that would otherwise be lost to the Exchequer) since 2021-22 to £15.8 billion in 2024-25. The return on investment on staff pay is four times more than what HMRC achieves across all taxpayers, with a £95 return on every £1 spent.

The tax gap for large businesses (the difference between what they should have paid in tax and what they actually paid) has steadily decreased over the long term, from £7.5 billion in 2005-06 to £5.8 billion in 2023-24, and is now at less than 1% of possible liabilities from all taxpayers. However, HMRC does not have reliable data to estimate short-term changes to the tax gap. HMRC’s estimate of the large-business tax gap increased by nearly £2 billion between 2020-21 and 2023-24, driven by a large spike in the tax gap for VAT, the data for which are particularly volatile.

Since 2006, HMRC has put 70 large businesses through its High Risk Corporates Programme, designed to tackle its most complex or riskiest cases. This has brought in more than £32 billion in extra tax. Since 2016, HMRC has had the power to put businesses that consistently fail to comply into a special measures regime, though it has never used this power.

The NAO found no evidence of HMRC reaching special deals with large businesses on how much tax they should pay. HMRC’s own testing found that it correctly followed its governance processes in 98.1% of cases it examined in 2024-25.

To help improve its efficiency further, the NAO has recommended that the large business directorate should now:

Ensure it carries out detailed planning and analysis to inform its approach to potentially expanding cooperative compliance to more businesses.Explore any barriers to using available legislative powers, such as special measures, when it identifies that businesses are behaving poorly regarding their tax compliance.Improve the recording of data on IT systems to ensure better understanding of productivity, and continue with planning for improvements to these IT systems.Build on the areas of good practice identified in this NAO report, and share these learnings with other HMRC directorates.

Gareth Davies, head of the NAO, said: “Through its large business directorate, HMRC has developed an efficient and effective approach to ensuring large businesses remain tax compliant. This has made a significant contribution to reducing the tax gap. HMRC should continue to explore whether this approach could usefully be extended to other complex and high-risk businesses.”

In the 2026/27 PPF Levy consultation the PPF expressed its intent to set a zero levy for conventional DB schemes dependent on the progress of the levy measures contained in the Pension Schemes Bill. As such, the PPF Board is reassured by the consideration given to the changes needed to conclude its decision making.

Michelle Ostermann, PPF CEO, said: “This is an important time for pensions. Not charging a levy to conventional schemes in 2026/27 reflects the evolution of risk in this sector and will reduce costs for DB schemes and employers. We’re grateful to all those who responded to our recent consultation, and more broadly for the ongoing dialogue and productive engagement with our members and levy payers throughout our 20-year history.”

The PPF has confirmed it will maintain a proportionate ACS (Alternative Covenant Schemes) levy next year. With the framework for superfunds evolving, and with the sector’s potential for significant growth, the PPF will continue to apply an ACS levy in 2026/27.

The PPF is committed to working closely with our stakeholders to review the ACS levy methodology for 2027/28 to ensure it continues to be proportionate to the risks posed.

The PPF will publish its Policy Statement and final rules for the 2026/27 levy next month.

That said, the potential cap shouldn’t be ignored. Any future Government may well be supportive of a cost-saving measure that’s unlikely to be at the top of the voter agenda. However now is not the time to abandon salary sacrifice. It continues to offer significant advantages, and employers who haven’t yet adopted it should give it serious consideration.

According to Howden research, currently 68% of UK SMEs are not using salary exchange to boost pension contributions and after-tax pay. This means they may potentially be missing out on £2.7 billion in employer national insurance (NI) savings and £1.8 billion in employee savings.

Higher earners may experience a smaller financial impact because their marginal National Insurance rate is lower (2%). However, they could still be disadvantaged if salary sacrifice is removed as an option (see point 5 below).

On the other hand, employers (particularly in higher-paying sectors) may feel the impact more significantly. They would be required to pay employer National Insurance at 13.8% on any salary sacrifice pension contributions exceeding the £2,000 threshold.

This means that salary sacrifice can still be beneficial for people looking to keep their salary at a certain level for things like retaining the personal allowance, child benefits, or funded childcare.

It’s possible to reduce ‘adjusted net income’ for this purpose without using salary sacrifice, but it involves communication with HMRC. The same is true of higher rate taxpayers claiming back additional relief.

Most payroll systems should be able to handle this, as they currently generally record pre and post sacrifice elements, but it’s important to check once the legislation is confirmed.

This proposed cap is purely about employees exchanging pay for contributions. In effect, it makes salary sacrifice a less efficient way of remunerating employees compared with increasing standard employer pension contributions.

Restructuring contribution models could therefore be a practical alternative. For example, instead of a 5% employee/5% employer split, a scheme could move to 3% employee/7% employer, or even a 10% employer-only (non-contributory) structure. In some cases, this may be more cost-effective for both parties.

Where contributions exceed automatic enrolment minimums, employers may also want to consider offering a cash allowance in-lieu of pension contributions. Whilst this would obviously be subject to NI and tax, it would be NI efficient if going to the pension. This approach is relatively straightforward for new hires, but changes for existing employees would likely require formal consultation.

That said, any redesign needs careful thought. Reducing salary to increase employer contributions may not suit everyone, particularly those who rely on their headline pay. Employers should assess the specific needs and preferences of their people and wait for detailed legislative guidance before making changes, in case practical barriers emerge.

While structural reforms that seek to widen access to overlooked groups such as the self-employed and others in less secure forms of work are welcome, constant tinkering makes long-term financial planning harder and risks discouraging engagement with retirement savings.

Lisa Picardo, Chief Business Officer UK at PensionBee, said: “Effective planning for retirement begins with a long term commitment to saving that stretches across decades. Frequent policy changes to an already complex pension environment can make it significantly harder for savers to feel confident about the decisions they are making today.

“Savers benefit from clarity and consistency. Assuming no surprises in the Spring forecast, the case for giving the system some desperately-needed stability, and allowing the general public time to digest the recent changes and their ramifications for their savings, has never been greater.

“Improving engagement with pensions hinges on trust. While frequent policy adjustments risk creating uncertainty about what the future will look like, a stable policy environment would help people plan with confidence.”

Rolls-Royce continues to impress with upgraded mid-term targets and a step-up in commitments to share buybacks. [MB1] WPP’s 2025 results were less encouraging, with competitive pressure weighing heavily on traditional advertising agencies. Like-for-like sales fell 3.6% to £13.6bn, and operating profit fell at a sharper 17.1% clip to £1.3bn. Further revenue declines are expected this year. Cindy Rose OBE will have to pull a rabbit out of the hat at today’s strategy update if investors are to buy into the group’s future-proofing credentials.

US stock futures are trading down slightly today. Beats by NVIDIA on Q4 financials and near-term guidance haven’t been enough to see the shares in the world’s most valuable company get another leg-up in after-market trading. Doubts are still being voiced over the sustainability of the company’s blistering growth. We think the numbers paint a different picture and remain very comfortable with NVIDIA’s inclusion as one of HL’s Five Shares to Watch for 2026. Hardware is the driving force of the AI revolution, and NVIDIA has a controlling position.

It’s a murkier picture for software companies. Salesforce’s Q4 numbers were stronger than expected, but investors in the sector are nervous, and the shares shed 4.6% after the close, on slightly more conservative guidance than analysts had been hoping for. With the forward earnings multiple at an all-time low, this could mark an attractive entry point if investors can be convinced that Salesforce is an AI winner. A bulging order book and booming sales of Agentforce are positive enough signs for management to authorise up to $50bn of share buybacks, over 25% of the company’s value. [AC2]

Brent Crude is back over $71 per barrel as both military and economic measures against Iran remain firmly on the table. Today’s bilateral talks in Geneva will be closely watched as Washington pushes for a deal on nuclear development. But upwards momentum has been stifled by a colossal 16mn addition to US oil inventories last week and rumours that Saudi Arabia is planning a further increase to production this year as its daily oil exports tipped a three-year high of 7.3mn barrels per day in the first 24 days of February.”

We've launched our new Regulatory Priorities reports, starting with the insurance sector. This marks a new approach that will help to transform our supervision and streamline regulation.

We expect regulated firms to follow the rules and stay informed about any changes. This is important for maintaining a safe and resilient market. Our mission to be a smarter regulator means reducing burden where we can, so that firms can get the information they need as efficiently as possible.

Our Regulatory Priorities publications are part of this drive to simplify things. They replace our portfolio letters, which set out our expectations for firms in various markets.

There were more than 40 of these letters, with some firms needing to work through several to understand what they needed to do. We know these created an extra layer of complexity, and we’ve responded to these concerns.

We’ve tested our approach with a pilot for insurance firms, which has helped us make sure the documents are easy to use. We’ve aimed to have clear content and easy navigation, summing up each of our priorities on one page with clear actions for firms.

The reports also set out what’s coming up in each sector - making them a succinct one-stop shop for regulatory information. We’ll publish them more frequently too, with an annual cycle - so it’s easier for firms to stay up to date with policies and issues as they develop.

The purpose remains the same though. Firms’ boards and chief executives should read these reports carefully, review the priorities we’ve set out – and act where they need to.

We want to keep the conversation going about how we can streamline our regulation and simplify our communication, letting firms spend more time serving their customers and creating growth. We hope these new reports will be part of that drive and are keen to know how they work for firms.

Each issue may seem small. The real risk is when one error triggers another and the organisation doesn’t spot the pattern early enough. This can lead to breaching minimum wage rules, paying the wrong pension amounts for months at a time, or creating discrepancies that could be challenged legally.

Taking action now protects employees and reduces the risk of fines, compliance breaches and legal challenges. It also helps employers build confidence that their arrangements are robust and ready for future regulatory change.

If you have any questions on anything covered in this blog or would like to discuss further, please get in touch.

Maike Currie, VP Personal Finance at PensionBee, commented: “Seeing women out-contribute men - for the crucial self-assessment month of January - is very encouraging, showing more women in their forties are in self-employment and/or are higher rate tax payers and conscious of the importance of making pension contributions. This matters as ONS data also shows that earnings peak at about age 44 for women, after which income growth tends to flatten and eventually decline. However, across other age groups the picture is still very uneven, despite improvements on previous years. Women aged 18 to 29 contributed 7% less than men, while those aged 60 to 69 contributed 26% less, a gap that reflects a lifetime of compounding disadvantage rather than disengagement.”

After that, women contributed less than men for each successive year, up until this January, reflecting the so-called ‘pandemic penalty’. While no-one was spared the far-reaching physical and financial impacts of the pandemic, women were more likely to work in those industries that required face-to-face interaction - retail, hospitality, travel, airlines, self-care and education - which suffered more during these years and consequently impacted financial resilience. Many women experienced a fall in income or left the workforce to care for children and/or sick or elderly relatives, which impacted both earnings and pension contributions.

PensionBee’s research found that every year spent out of the workforce for unpaid care reduces a pension pot by roughly £5,000 at retirement, while switching to part-time work reduces it by £2,000.

Despite the positive trend, when it comes to the contributions of those women in their 40s, the wider gender backdrop remains stark. Pensions Policy Institute (PPI) data shows that for men aged 45 to 49, the median pension pot at £138,816 is more than twice that of women at £67,975. This substantial gender pension gap is largely due to the financial penalties of motherhood and caregiving, referred to as the ‘motherhood’ and ‘good daughter’ penalty, respectively.

Maike Currie commented: “In January 2024, women contributed less than half as much as men; last year that gap narrowed significantly; and this year, women overtook men altogether.

“There is clearly growing engagement and a determination from women in their mid-forties in particular to bolster their retirement savings. However, closing the gender pension gap will require systemic reform. Women remain overrepresented among the UK’s ‘invisible workers’ - falling outside the net of Auto-Enrolment, which has very much been designed around formal employment structures and the payroll.

“PensionBee’s Invisible Worker campaign, is calling on the Government to expand Auto-Enrolment by removing the £10,000 earnings trigger and enabling the self-employed to save through their Self-Assessment tax returns. These changes will help tackle structural inequalities like the gender pension gap.”

Table 1: Women’s contributions as a percentage of men’s, January 2024-26

Source: PensionBee data, January 2026

When making its decision, Trinity Retirement Benefit Scheme Limited (the “Trustee” of the Scheme) recognised M&G’s strong financial position and well-known brand. The Trustee was also assured by the flexibility offered by the proposition and its alignment with a range of key requirements, including a bespoke price lock matching the Scheme’s existing assets and M&G’s ability to support a continuation of excellent member service.

LCP acted as the lead transaction adviser for the Scheme with DLA Piper providing legal advice to the Trustee, Aon acting as Scheme Actuary and Mercer providing covenant advice. Hymans Robertson and Slaughter and May advised Reach plc.

Rosie Fantom, Head of Pension Risk Transfer Origination & Execution at M&G, said: “We are delighted to partner with the Trustee of the Trinity Retirement Benefit Scheme to secure the long-term financial security of its members. This transaction underlines M&G’s position as a leading provider in the bulk annuity market and we remain committed to supporting trustees and schemes in managing pension risk, backed by our strong financial foundation and proven expertise in execution.”

Susan Anyan, Chair of the Trustee of the Scheme and a Professional Trustee at Capital Cranfield, said: “We are delighted to have been able to secure members’ benefits as a result of this transaction, following an intensive and highly collaborative process. This successful outcome reflects the hard work, shared ambition and dedication of both the Trustee and Reach plc, heavily supported throughout by a multidisciplinary team of expert advisers.”

Darren Fisher, CFO of Reach plc, said: “This successful transaction is an important milestone for the Company and the Scheme. We have worked closely with the Trustee of the Scheme over several years to reach this point and it is a testament to the collaborative approach taken by all parties that we have been able to achieve this positive outcome for both the Scheme members and the Company’s shareholders.”

Ruth Ward, Principal at LCP said: “I am proud to have supported the Trustee to achieve this significant milestone of insuring all Scheme members. A detailed preparation phase before seeking quotations facilitated a smooth broking process, giving all parties confidence that risks are being well-managed, and careful planning for how the Scheme’s excellent member service will be maintained post transaction. This resulted in a highly competitive process and an excellent outcome for the Scheme and its members.”

HSBC’s results this morning told a familiar, reassuring story for Asian bank investors: the engine is still humming and management confidence is quietly building. This morning’s 9% profit beat was driven by core banking momentum rather than one-offs, while guidance struck a notably more upbeat tone, pointing to stronger earnings power and returns as we move into 2026. Like Standard Chartered yesterday, there looks to be a clearer runway ahead, with revenue growth expectations nudging higher and costs staying disciplined. With capital being rebuilt after buying the remaining stake in Hang Seng, buybacks are on pause for the time being - but consensus numbers for 2026 now look ripe for another leg up.

US markets found their footing yesterday, with the S&P 500 and Nasdaq climbing as investors warmed (if only just a touch) to a more nuanced AI narrative. Anthropic’s enterprise demo was the cocktail-party chatter, but the key takeaway wasn’t disruption for disruption’s sake - it was partnership, with AI framed as a layer that enhances existing software rather than blowing it up. That subtle shift matters, and while the software rally barely raised an eyebrow in the wake of the recent selloff, it could prove to be the first baby step toward restoring confidence in a bruised sector. Still, one well-received demo doesn’t make a trend, and markets are perfectly capable of staying irrational far longer than logic would suggest.

In streaming land, the Warner Bros bidding war has sprung back to life, with its board signalling that Paramount’s tweaked offer could now qualify as a superior proposal. The headline price is an improved $31 per share, sweetened by a ticking fee and tougher break-up protections. Paramount has clearly sharpened its pencil, waiving downside protection on WBD’s networks business and putting more money at risk if the deal collapses. If this new deal is seen as superior, the ball will be back in Netflix’s court, which will have 4 days to respond and, given the deal maths, will most likely come back with a better offer of its own. It almost feels like a no-brainer for WBD to push this back onto Netflix, even if just to squeeze out some extra juice.

Oil steadied after its recent wobble, with Brent edging back toward the low-$70s as geopolitics crept back into focus. Rhetoric around US-Iran nuclear talks, and the ever-sensitive Strait of Hormuz, reminded markets how quickly supply risk can re-enter the frame, even as diplomacy remains the stated preference. That said, concerns over global demand, not least from fresh US trade measures, continue to cap enthusiasm and keep the move measured rather than dramatic.”

While many savers make use of ISAs to shelter interest from tax, those who don’t utilise their ISA allowance – or who have already used the full £20,000 limit – may face a much larger tax bill than expected.

With income tax bands now frozen until 2031, more people are moving into higher and additional rate brackets each year, making tax on interest a growing issue for households who may not realise they’re affected.

The potential annual gain of saving £30,000 for a higher rate taxpayer after one year

Inflation calculated on the value after tax on interest and charges for taxable cash account and ISA, and after tax relief, investment growth and charges on the pension. Up to ?20,000 each year can be deposited in an ISA.

Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group said: “Higher interest rates can lull people into thinking their cash is working harder than it really is. Frozen income tax thresholds are pushing more people into higher tax brackets each year and the amount of interest lost to tax could come as quite a surprise, especially with inflation to consider too.

“While ISAs are a solid tax-efficient option, pensions are where the tax system truly works in your favour. For a higher-rate taxpayer, a qualifying £30,000 contribution can instantly become £50,000 through tax relief. If you’re planning for the long-term, that head start is incredibly difficult for cash savings to compete with.”

Mike’s top tips for tax efficient savings

Speciality chemical company Croda International’s 2025 results contained few bangs or flashes but painted a resilient picture as management continue to execute its transformation plan. Revenue grew by 6.6% to £1.7bn before exchange rate moves, and underlying pre-tax profit was up 8.4% to £276mn, slightly ahead of forecasts. Tariff uncertainty made for a tough trading environment for Croda, which was one of Hargreaves Lansdown’s shares to watch in 2025. But broad-based sales growth and efficiency gains have helped support an 11% rise in the share price since the company was highlighted to HL investors. With a similar trading performance expected this year, there could be more to come, particularly if the market gains confidence in the company’s plans to expand underlying operating margins to over 20% over the next three years.

Despite an unprecedented 65% rise over the last year, gold continues to attract safe-haven monies as investors try to assess what the new normal for global trade looks like following last week’s Supreme Court ruling against Donald Trump’s Liberation Day Tariffs and his subsequent threat of a 15% baseline tariff. However, it now looks like the new levy will come in at a more benign 10%, and gold prices have pulled back around 1% after four straight days of gains. Copper prices have been moving on up, benefitting from hopes that the court order will result in lower import levies on Chinese goods, thereby providing a boost to manufacturing activity.

That was also reflected in Chinese equities after markets reopened following the pause to welcome the lunar Year of the Fire Horse. The major exception was Hong Kong’s tech-dominated Hang Seng, which lost over 2% as the AI fear trade spread eastwards.

US stock futures are pointing to a mild recovery at the open after the major indices all lost over 1% yesterday. The latest domino to fall in response to potential disruption from Artificial Intelligence is IT consulting. Anthropic continues to be the chief antagonist, this time unveiling a tool that promises to plug the knowledge shortage for the legacy programming language COBOL, which still underpins IT infrastructure across sectors as diverse as financial services, airlines and the public sector. It’s still too early to say just how much the likes of Claude Code will displace established providers of coding services, but right now, just the mere mention of a new tool is enough to wipe billions of dollars off the value of Accenture (-6%) and IBM Shares (-13%).

Industrial stocks and US financials also had a tough start to the week with tariff uncertainty hanging thick in the air as America’s trading partners weigh up their responses to Washington’s blanket levies and Donald Trump’s sabre-rattling.

Brent Crude prices have risen to nearly $72 per barrel as diplomatic efforts between Washington and Tehran send mixed signals about the likelihood of military escalation. The temporary closure of the Strait of Hormuz earlier this month has left traders increasingly sensitive to developments in the region. Reported Ukrainian drone strikes on Russian infrastructure have added to the tension. Add in expectations of an oil surplus this year and the ever-shifting trade landscape, and further volatility looks to be the only certainty.”

But while these Overviews may be reducing the need to go direct to the source for key information from websites such as the Government-run free and impartial MoneyHelper, they do not appear to have reduced traffic to services that offer more bespoke guidance, such as Pension Wise, which allows savers over 50 to book a free appointment for pension guidance.

Traffic to MoneyHelper is down 10% over the last six months, according to data gathered on semrush, the online search marketing platform, while the website has seen a steady increase in the number of AI Overviews generated from MoneyHelper’s content, over time.

OpenAI itself has noted a use case for ChatGPT among retirement savers. When asked how retired people or people approaching retirement in the UK are currently using ChatGPT and other AI tools to help with their financial planning, ChatGPT said: “Retired people and those nearing retirement are quietly but meaningfully using ChatGPT and similar AI tools as a thinking partner, not a replacement for regulated advice.”

The AI firm identified that sense-checking retirement decisions is the biggest use in this category, followed by modelling “what-if” retirement scenarios (informally), translating UK pension jargon into normal language; tax awareness and planning (with caution); co-ordinating the whole retirement picture and emotional reassurance and confidence-building.

Luis Mejia, Head of Data and AI at PensionBee, said: “As many of us have experienced, AI is a generally good substitute for some financial guidance, but advisory services are better protected. In the face of continued improvements to AI technology, the retirement industry faces a serious challenge of remaining relevant and trusted while savers increasingly rely on AI for more complex guidance and even personalised advice”.

The "Guidance" vs. "Service" Split

The semrush data illustrates the divide between Informational Guidance (vulnerable to AI) and Transactional Services (resilient to AI).

2. Is AI replacing Advice?

Strictly speaking, no. AI is currently replacing Guidance, not Regulated Advice.

The Financial Conduct Authority is examining the impact of AI for financial services and consumers under the Mills Review, launched at the end of January. It set up the AI consortium in 2025 with the Bank of England. Meanwhile the Treasury Committee published a report ‘AI in Financial Services’, summarising current views.

Based in London, Lewkowicz will now be responsible for spearheading WTW’s global P&C capital modelling and reinsurance pricing solutions, driving innovation, business development and tailored solutions that help insurers better understand their risk and capital needs.

Commenting on the appointment, Charlie Kefford, Global Proposition Leader, P&C Insurance Technology, WTW, said: “This appointment reflects our commitment to investing in exceptional talent and strengthening our capital modelling and reinsurance pricing capabilities. George brings a wealth of experience and a proven track record of delivering results, which will be instrumental in enabling our clients to succeed.”

Igloo is used by over 1,000 users in over 150 companies. These range from the smallest single line businesses to the largest multi-nationals, including six top 10 US non-life insurers, five top 10 European insurers and six top 10 Asia-Pacific non-life insurers.

As the market has moved, so has Igloo and the consulting and implementation support behind it. After nearly 20 years of constant development and innovation, Igloo is the common language of capital, reinsurance and risk modelling.

Wall Street ended last week on a high after the Supreme Court struck down the Trump administration's use of its preferred tariff powers, with investors quickly repricing the outlook for lower effective tariff rates. That optimism is fading somewhat this morning, however, with US futures pointing lower as the dust settles and investors strap back in for another wave of tariff uncertainty.

Taking a step back, though, there’s an argument that this is a positive development for investors. The Supreme Court ruling was largely expected and sends an unambiguous signal that there are limits to the executive's power over trade and tariffs. Tariff headlines will no doubt continue to dominate the news cycle, but the goalposts have shifted – the near-unlimited use of tariffs under the old powers has come to an end, and for markets that have spent months toying with worst-case scenarios, that's a small silver lining.

Oil prices are pulling back from a recent six-month high as the prospect of a US–Iran nuclear deal gathered pace, with further negotiations expected later this week. Iran's foreign minister struck an optimistic tone, suggesting a diplomatic solution is within reach, while reports that any potential US military action would be limited in scope eased fears of broader supply disruptions. Tariff changes are adding further pressure, with traders wary of what a fresh drag on global growth could mean for oil demand.

Away from the trade drama, this is a major week for corporate results, with some heavyweight names set to update investors. It's a timely reminder that underneath the macro headlines, company fundamentals still matter - and there's plenty to get stuck into this week.

Nvidia continues to defy the law of large numbers, with fourth-quarter revenue growth expected to accelerate to nearly 70% at the top end of guidance - a figure the company looks well-placed to beat. The AI buildout shows no signs of slowing, a new chip architecture is launching this year, and mega-cap customers are planning heavy investment in AI infrastructure, all of which point to another strong year ahead. Key things to watch include updates on the order backlog, early production progress on the new Rubin platform, and how margins are expected to track. China will inevitably grab some attention given the ongoing difficulties getting orders through customs, but it's unlikely to be a major dial mover either way.

Rolls-Royce looks set to fly past profit expectations, with strong demand in Civil Aerospace remaining the key theme. Large Engine Flying Hours, a key revenue driver, grew 8% over the first ten months of the year, reaching 109% of pre-pandemic levels, while a healthy flow of large engine orders provides good near-term visibility. Add in impressive growth from data centre demand in the Power Systems division, and full-year guidance of £3.1–3.2 billion in underlying operating profits could well prove conservative given the company's growing track record of overdelivering.

IAG rounds out the week with demand holding up well across its airlines, particularly at British Airways, where a dominant share of Heathrow's capacity-constrained slots continues to put upward pressure on ticket prices. Easing fuel costs provide a further tailwind, pushing market expectations for full-year operating profits to around £5.0 billion - reflecting growth of roughly 13%. All eyes will be on the size of a new share buyback programme, expected to be around €1.8 billion, as the group seeks to balance fleet expansion and digital investment with returning cash to shareholders.”

And unlike most other financial instruments, there’s a remarkably clear relative value signal between government and corporate bonds. Buying corporate bonds instead of government bonds means taking default risk, pricing risk (in spreads) and illiquidity risk (though IG is normally liquid, this can dry up in a troubled market). For the UK market specifically, there is also contagion risk (in that if anything goes wrong in any one of the gilt, UK DB, or UK IG markets, they’re so interconnected that any rot could spread very quickly to the other two); for foreign currency bonds, there are FX hedging, rebalancing and collateral risks too.

Investors need to be paid for taking these risks, and they generally are- the spreads are positive, and generally provide enough to both compensate for the risk and earn a return. But there is clearly a price at which it stops making sense, if not for all investors (eg for those with particular tax incentives), then at least for those with fewer constraints. If the spreads on IG bonds were negative, we would expect DB schemes to sell their holdings, for example.

So where is the level at which it stops making sense? And are we through it now?

Source: Data: ICE; Calculations: Gallagher

One way of looking at it is to reverse the question- what needs to happen to wipe out all the excess returns? The wider the spread, the better the price, and the more headroom you have to soak up losses. Right now, there’s not much- in fact, a 13bp move over the year would wipe out all the excess returns. For context, IG spreads have moved by at least 13bps over a year 76% of the time[1]. For 98.4% of the history (since 2000), investors have been better compensated than they are today. We are not at quite the worst spread levels ever seen, but current levels are close.

Source: Data: ICE; Calculations: Gallagher. Index is C0A0 – US all IG. The bottom row shows the current level as a historical percentile- eg only 1.6% of the time have spreads been lower than current levels.

There are those who will counter that spread widenings don’t matter, because if you hold the bonds to maturity you still earn the spread. There are complications here, especially around collateral and FX, but to whatever extent you can hold bonds to maturity the same logic around tight spreads applies to default rates. On average, investors could have managed a default rate of 2.5% (assuming 40% recovery rates) and broken even. Currently that buffer is just over half the size, at 1.4%. That’s not an unreasonable number of defaults- for context, 6-7 year BBB default rates have averaged about 3%.

But even if they don’t, we’re quite likely to see a widening in spreads; if we don’t, it probably means every risk asset would have done well anyway. If we do, then at that point investors who had held less in credit would have more firepower to buy bonds when prices lowered. And to earn returns of c1%, there are no shortage of good options, especially as you can replace £100 of IG with (say) £30 of something higher returning and £70 of cash. As a starting point, three of my personal favourites are:

Put-spread selling (c50-70% exposure needed)Absolute return rates funds (c30-50% exposure needed)ILS (in much smaller quantities, only about 10% as much exposure would be needed)

All in all, as spreads creep lower and lower, investors must eventually reach a price at which IG credit just doesn’t work anymore. If you think we’re nearly there, then it’s probably a good time to think about diversifying the first 10-20% of your IG holding.

[1] Source: Data: ICE; Calculations: Gallagher

With the current Pension Schemes Bill poised to transform the pensions sector, Ben will continue TPR’s transition to a more prudential-style of regulation as the pensions landscape consolidates towards fewer, larger schemes. He will be responsible for the teams that supervise and engage with the businesses and trustees in the pensions market.

Alongside Ben’s interim appointment, TPR is launching a recruitment exercise to appoint a permanent Executive Director, Market Oversight, led by head-hunters Odgers.

Ben will lead the Market Oversight directorate from 23 February 2026, replacing current Interim Executive Director Julian Lyne. Julian joined TPR on an interim basis last April. He is leaving to take up a new opportunity with an investment management firm, following a hand-over with Ben to ensure a smooth transition.

CEO Nausicaa Delfas said: “I am delighted Ben is joining us as interim Executive Director of Market Oversight. His financial services expertise and market knowledge will be invaluable as we focus on the practical implementation of the pension reform agenda and deliver the best possible outcomes for savers. I would also like to thank Julian Lyne for his very positive contribution at TPR, and wish him all the best in his new role".

Interim Executive Director, Market Oversight Ben Gunnee said: “I am excited to be stepping into this role at one of the most important times for pensions. We have the opportunity to build a resilient and well-functioning defined contribution market, provide security for members of defined benefit schemes and drive stronger governance across private and public sector schemes. TPR’s role in bringing about these changes will be crucial.”

Nestlé's full-year results this morning offered shareholders some welcome relief after weeks of hand-wringing over the infant formula recall saga. Fourth-quarter organic growth of 4.0% comfortably beat expectations, driven by volume gains the company called its best in over a decade, with PetCare a particular bright spot. The formula crisis looks set to impact growth far less than many had feared, and guidance of 3-4% organic growth for 2026 should help settle some nerves. New leadership is also wasting no time putting its stamp on the business, announcing a sharper focus on Coffee, Pet and Nutrition while signalling the exit of non-core assets, including ice cream - a clear statement of intent that should be well received.

Rio Tinto echoed a familiar theme for this mining earnings season - copper stealing the spotlight. The copper division delivered a 114% jump in cash profit (EBITDA), powered by the ramp-up at Oyu Tolgoi, and the numbers only reinforce why the market is increasingly valuing these diversified miners on their copper credentials. At the group level, cash profits rose 9%, as strong volumes and tight cost discipline offset softer iron ore prices, while a $6.5 billion dividend, maintaining a 60% payout for a tenth straight year, gives income investors something to work with. With copper a clear focus for 2026, albeit with slightly higher costs than expected, new CEO Simon Trott is clearly betting that the red metal will define Rio's next chapter.

US markets closed in the green last night, with the S&P 500 up 0.5% and the Nasdaq leading the way with a 0.8% gain. Tech felt some love as Nvidia climbed 2.2% on news that Meta will deploy millions of its processors in the coming years, a small step forward for a sector still trying to shake off jitters around AI spending. It looked set to be an even stronger session, with the S&P 500 up as much as 1% at one point, but the mood cooled after the release of the Fed's latest meeting minutes. US futures are pointing higher this morning, suggesting investors may be ready to look past the Fed noise and push on.

The January Fed meeting minutes made for uncomfortable reading, revealing a central bank struggling to find consensus on where rates go from here. In a notable hawkish twist, some officials floated the idea of raising rates if inflation proves stubborn - a far cry from the rate-cutting narrative markets had been banking on. Others maintained that further cuts would be warranted if price pressures continue to ease, leaving the outlook as clear as mud. Bond yields drifted higher following the release, a reminder that the path forward for monetary policy is anything but straightforward.

Oil is extending its gains, with Brent crude back above $70 a barrel this morning, building on its strongest daily gain since late October as fears of a military confrontation between the US and Iran rattled energy markets. Nuclear talks between the two sides appear to be going nowhere fast, and the geopolitical premium is clearly back in play. That’s overshadowing a modest draw in US crude inventories that did little to shift the supply picture.”

With people living longer but in increasingly poorer health, many retirees may find themselves spending more on care, insurance or other support services than anticipated.

Maike Currie, VP Personal Finance at PensionBee comments: “There’s a worrying shift in the UK’s longevity story: while life expectancy has recovered since the pandemic, the share of life spent in good health is shrinking.

“We are not just living longer - we are living longer with illness, disability and care needs. This has far-reaching implications for policymakers, the NHS and our own personal finances. It’s important to distinguish between your “health span” - the active years - and your “care span”, when support may be needed and costs can escalate sharply.

“Retirement spending can often be higher in the early years when we’re healthy, active and spending on travel and experiences. It then dips as life and mobility slows. It can then rise again sharply as health needs increase and care costs bite. Plotted on a graph, it looks like a smile: up, down, then up again.

“Later-life care can be prolonged and eye-wateringly expensive, yet the UK still lacks dedicated savings products to help households plan for this phase - a gap that disproportionately affects women, who typically live longer but retire with significantly smaller pension pots. The result is a growing mismatch between longer lives, shrinking healthy years and a system still poorly designed for the true costs of aging.”

Helen Morrissey, head of retirement analysis, Hargreaves Lansdown: “We may be living longer, but we aren’t living healthier, with the latest data showing healthy life expectancy has plummeted. In 2022-24, men in the UK can expect to spend 60.7 years in "good" general health. This compares to 60.9 years for women. Compared to 2019-21, this is a decrease of 1.8 and 2.5 years and is at the lowest level since the data was first collected in 2011-13.

There are huge differences across the country, with Richmond upon Thames having the highest healthy life expectancy across both men (69.3 years) and women (70.3 years). Blackpool has the lowest at 50.9 and 51.8 years, respectively.

These discrepancies have massive implications for our retirement planning. Poor health can have massive impacts on our ability to keep working and building up a pension for our retirement. It puts people in the sticky position of building a smaller pension because their working lives are shorter but needing it to last longer.

Added to this is the issue with the state pension. The state pension age will soon be making its way up to age 67. It forms the very backbone of people’s retirement income and yet there will be many who will have a gap of several years between potentially having to leave work and claiming this benefit – how do they make up the gap?

These will be big issues for the government, with a review into the state pension age ongoing. The issue of healthy life expectancy will be key in any discussions around whether the state pension age needs to rise further. It also shows the huge importance of offering flexible working arrangements, or re-training, to those who may still be able to keep working in some capacity.

Auto-enrolment will play a huge role in boosting people’s pension adequacy over time. The fact that people are enrolled into a workplace pension from the age of 22 enables them to build a pension that will give them some level of resilience in retirement. Wherever possible, people should try and boost contributions as and when they can afford it - for instance when they get a payrise to help build their pension further.

It also shows the massive importance of building savings over and above pensions if you are able to. It might be the case that you need to leave or make big modifications to your working life at an age where you are unable to access your pension. In this case, having money in ISAs and savings accounts will be hugely important in giving you something else to draw from.”

In a market as competitive as U.K. motor insurance, having a clear understanding of the wider landscape is critical. Insurance providers need to understand how they are performing relative to the rest of the market to contextualise their own results and make strategic decisions in an environment where small changes in behaviour or pricing can have a big impact on performance.

Switching also slowed. In H1 2024, 25% of policyholders switched provider, but that figure fell slightly to 22% in H1 2025. Switching declined most noticeably in Q1 2025 before stabilising in Q2 as motor insurance premiums began to level off.

While this cooling trend in shopping seems closely tied to what’s been happening with premiums, it could be short-lived. With repair and theft costs rising[ii], there’s a growing expectation that motor insurance premiums will begin to climb again.

However, in H1 2025, falling premiums appear to have given the rest of the market outside of the Top 10 an opportunity to gain some ground, with smaller insurance providers seeing a 30% increase in net customer gains.

This highlights how quickly consumer loyalty can shift when pricing pressures change. Some smaller brands appeared to capitalise on softer pricing conditions, while major players appeared to focus more on profitability and risk quality.

That dynamic could soon swing again. As premiums begin to edge upward — driven by higher repair costs and the ongoing rise in thefts — larger insurance providers, with their scale and pricing power, may start regaining ground.

In H1 2025, policies from the Top 10 insurance providers were less likely to be cancelled within the first three months of starting, compared to the rest of the market. This suggests the biggest brands were attracting more consistent and loyal policyholders — likely supported by stronger risk assessment processes at the point of quote.

For smaller insurance providers, the picture is more mixed. Cancellations within three months of policy inception were 29% higher for providers outside the Top 10, implying that the net gain in customers came with a higher risk of churn or fraud.

At the same time, the Top 10 insurance providers acted faster when cancellations did occur. Based on the LexisNexis Risk Solutions data for insurer-led cancellations, the Top 10 cancelled 23% more policies during the first 15 days of policy inception H1 2025, compared to the same period in 2024. This trend points to more efficient fraud screening and early intervention.

This shift reflects ongoing economic pressures that have meant some motorists are holding onto their vehicles for longer. Despite this, the proportion of brand-new cars (less than one year old) in the insured vehicle mix has ticked up slightly — from 2.6% in late 2023 to 3.1% in H1 2025 — possibly aided by easing interest rates and improved access to finance.

Having access to detailed, individual-level data is vital when pricing motor insurance, but it is the ability to place that insight within a broader market context that truly drives competitive advantage. Insurance providers that use the current period to look outside their own four walls will stand a greater chance of strengthening pricing discipline, enhancing fraud detection, and refining risk selection, putting in them in the best place to thrive when rates start to rise again.

Damage to people’s homes as a result of a storm reached £244 million in 2025, a 32% (£59 million) increase from the previous year. The average storm damage payout in 2025 reached £2,450. This is £750 more than 2024. The cost of domestic flood claims rose by 38% (to £312 million), and the average flood payout to a homeowner also rose significantly by 60%, reaching £30,000.

Whilst storms and flooding played a significant part in increased payouts, the wider effects of extreme weather also extended into subsidence. The Met Office reported summer 2025 as the UK’s hottest on record, creating conditions that can increase the risk of ground and soil shrinkage which saw domestic subsidence payouts rise to £307 million, up 10% (£27 million) year on year and reaching their highest level on record.

In 2025 insurers paid out almost £3.4 billion across more than 560,000 home insurance claims. The average claim increased by 15% year-on-year, rising by almost £800 to £6,000.

Chris Bose, Director of General Insurance Policy at the ABI, said: “Once again, we’re seeing the toll that increasingly severe weather is taking on homes and businesses across the UK. A record £6.1 billion in property claims last year shows both the scale of the damage and the vital role insurers play in helping people recover. Government action is essential to protect communities from the growing impact of extreme weather. This includes stronger planning rules to stop building in high-risk flood areas and designing homes with resilience in mind.”

David Best, Deputy Chair of Trustees at the Sopra Steria Retirement Benefits Scheme, who led the final selection process said: “We’re pleased to have agreed this transaction with PIC, which will secure our members’ benefits for the long term and means that they will continue to receive high-quality customer service. PIC has a well-founded reputation for providing excellent customer service levels and the focus on their policyholders shone through during the process.”

Deepash Amin, Head of New Business Strategy at PIC, said: “We were impressed with the focus of the Trustees on the member experience as part of the transaction, and we’re therefore delighted to have been selected. PIC is built around the delivery of our purpose, which is to pay the pensions of our current and future policyholders, and we look forward to welcoming the Scheme members in due course.”

Maria Greene, CFO at Sopra Steria UK, said: “We’re pleased that the SMP defined benefit pension scheme has completed a buy-in transaction, which provides long-term security for members’ benefits and represents an important milestone for the company.”

Chris Hawes at Mercer, who advised the sponsoring employer Sopra Steria Limited and led the insurance broking, said: “We are proud to have led this project, working in close strategic collaboration with the Trustee and Scheme sponsor from the outset to secure the benefits of Section members. Through a focused and competitive selection process, the strong partnership ensured that the shared objectives were successfully achieved.”

CMS advised PIC and legal advice was provided to the Trustee by Gowling WLG.

Your risk management approach can keep pace with climate realities and ensure your role remains relevant. By advocating for modern means of identifying and quantifying climate risks plus alternative risk transfer options, such as captives and parametric solutions, you can better protect your organization and the contribution of risk management to its success.

Below, we offer practical steps to help ensure you’re part of the future of insuring climate risks. We cover:

From catastrophic flooding in Spain, to the second-worst wildfire season on record in Canada to record-breaking heatwaves across South America and the Caribbean, the world has experienced a new level of climate disruption in recent years.

Natural catastrophes caused more than US$100 billion in insured losses in 2025 – the sixth consecutive year above that threshold, yet a decrease of $40 billion when compared with 2024. The level of losses recorded, without a single hurricane making landfall in the United States, highlights the continued severity and persistence of natural catastrophe risk. These losses included the destruction of physical assets, such as factories and power grids, disruption of critical supply chains, business closures and halted production across entire sectors

We’ve seen how climate protection gaps are especially pronounced in regions most vulnerable to climate change, where insurance can be unaffordable or unavailable. That means more risk managers are recognizing how safeguarding the future of organizations means exploring new solutions for increasingly uninsurable climate-related risks.

Heavy rainfall, for example, may impact soil stability, prompting landslides that prolong business interruptions and cause further damage to critical infrastructure. Traditional modeling might not recognize or quantify such interconnections between primary and secondary events.

By combining robust analytics, the latest catastrophe models and tailored solutions to address your specific challenges and vulnerabilities across longer time horizons, risk managers can understand and manage climate exposures more comprehensively. You can also develop stronger, more resilient insurance strategies.

Solutions tailored to your industry-specific challenges, such as quantifying shared-fate downtime for data centers, or assessing operational risks for global manufacturers, can enable your business to embrace uncertainty.

Getting this right means considering hidden and correlated risks, such as a nat cat event impacting both your site and your utility supplier. Traditional facility-only assessments and planning often overlook these connected risks. For example, many business continuity plans work on the assumption utility providers will restore services quickly, but the same natural disaster impacting your facility can also damage utility providers’ infrastructure.

So, how can you minimize downtime and optimize capital allocation across competing resilience investments to maximize your ROI (return on investment)?

The answers lie in using tailored analytics, engineering insight and data-driven climate adaptation strategies. We recommend carrying out rigorous cost-benefit analysis of structural, operational and procedural enhancements, coupled with robust business continuity planning.

Why should more organizations consider captives and alternative risk transfer solutions to close climate protection gaps?

Parametric insurance also gives you an alternative approach to risk transfer that can help you recover faster when natural catastrophes strike. Policy triggers are attached to thresholds on a given index being met, such as an amount of rainfall, days without rain or wind speed, rather than there being specific property damage, which an insurer would need to take time to evaluate before settling your claim.

By defaulting to an early and more advisory approach, you can guide your organization through complex risks and offer leadership on industry-specific challenges. Risk management can be the business function that prepares the organization to consistently take control of its destiny in the face of climate and hypervolatility, rather than simply responding to losses after they occur.

We recently worked with Swiss Re Corporate Solutions to develop an innovative parametric policy activated by red weather warnings, bridging the protection gap left by traditional insurance policies. These typically respond to the physical damage impacts of weather events, such as storms and floods, but not the cost of the pre-emptive actions businesses, particularly in the leisure and hospitality industry, need to take after a weather warning has been issued.

We’re also working collaboratively with our clients and their engineering consultants to develop new engineering-based models to better quantify physical damage to specific assets and operational disruptions from key emerging and non-insurable risks, such as heat stress and cold, as well. Furthermore, we are working together to advise on climate-resilient design and strategic site selection.

This collaboration-ready mindset is becoming essential. Joint working will help you develop new models and solutions that can shape the future of risk management and the influence of your role, while ensuring your organization remains well-prepared for whatever comes next.

To find out more about how you can use advanced analytics and scenario testing to address widening protection gaps, get in touch with our specialists.

And read how to take a more strategic role alongside sustainability functions in the climate and sustainability conversation.

Clare Stinton, Financial Wellbeing Lead, Hargreaves Lansdown: “Fresh figures released this morning show a steady increase in the number of people claiming the State Pension, with 13.2 million now receiving payments – a rise of 243,000. The average weekly payment has also climbed to £210.73, up £8.78 year-on-year, offering retirees a small but welcome boost amidst ongoing cost-of-living pressures.

The number of people claiming the new State Pension is growing too, with 5 million retirees now receiving it, an increase of 740,000 since August 2024. The new system bases entitlement on an individual’s National Insurance (NI) record, which has been a gamechanger for women, helping to close the historic inequalities embedded in the old State Pension.

Women are benefiting from the new State Pension system, with female recipients receiving on average £214.41 per week, compared with £194.94 for women receiving payments via the legacy system. However, this pattern does not hold for men, whose average payments under the old State Pension remain slightly higher at £225.04 per week, compared to £214.41 under the new State Pension.

The data also highlights reliance on Pension Credit, with women making up 66% of recipients. This underlines the ongoing financial vulnerability many older women face, despite progress in narrowing pension disparities.

To receive the full £230.25 in the 2025/26 tax year, retirees need 35 qualifying years of NI contributions. For anyone receiving less than the full amount - or those approaching retirement - now is the time to check your NI record via the Government website to make sure you’re getting every pound you’re entitled to.

Missing years don’t have to mean missing money. You may be able to plug gaps in your NI record through benefit credits, and some credits, such as those for periods when you were eligible for Child Benefit or Carer’s Allowance should be applied automatically, so it’s worth checking for any errors. Voluntary contributions can also help, and most gaps can usually be backdated for the previous six tax years.”

From a stock market perspective, the year was strong. The MSCI China benchmark rose 23.42% in the 12 months to the end of January 2026. This followed the positive end to 2024, when the government announced a series of stimulus measures to support the ailing economy. A stock market delivering growth is a welcome return to form for a country which endured a bleak period when recovering from a strict zero-Covid policy. That said, China underperformed the broader emerging markets sector in the last 12 months. China makes up over a quarter of the index but its performance lagged peers like Taiwan and South Korea. Despite this recent reversal in performance, investors continue to shun China as a standalone investment. Flows into the IA China/Greater China peer group were negative once again in 2025, although money left these funds at a slower rate than in 2022-2024.

China’s latest Five Year Plan, the government’s 15th set of initiatives since the first in 1953, covers the years 2026-2030. At the centre is expected to be a focus on modernising industries and establishing a technological self-reliance. With AI innovation a dominant theme in global markets, China has often found itself on the wrong side of export controls. The US has frequently placed strict controls on China’s ability to acquire the most advanced semiconductors, including those required by AI technologies. As a result, China has been forced to develop these technologies domestically. Many Chinese companies, such as semiconductor manufacturer GigaDevice, are opening themselves to foreign investors in a bid to fund further research and development. The reaction of investors to new listings suggests these companies have plenty to offer. One year on from the launch of China’s DeepSeek AI model that shook global markets, more Chinese companies are preparing to launch their own low-cost AI platforms.

Company valuations in China have risen as the market has started to perform, but they remain lower than both broader emerging markets and global markets. Pair this with expectations of robust earnings growth, particularly from technology and consumer discretionary sectors, and China has a potentially compelling case for attracting investors once again.

While issues that have plagued China’s economy in recent years persist, there is evidence that things are beginning to improve. That said, there’s still some way to go. This leaves plenty to watch as we enter the Year of the Horse. According to Chinese astrology, the Horse is confident, agreeable, and responsible. To an investor focused on the long term, these are promising attributes. A word of warning though – the Horse also dislikes being reined in.

This has become even more important over recent years, with the majority of buy-outs including large numbers of deferred members who are yet to make decisions on how and when they take their benefits, requiring more interaction with the insurer.

Underpinning trustees’ focus on member experience is an evolving regulatory landscape. The recently introduced requirement for insurers to adopt the FCA’s Consumer Duty rules is raising standards across the industry. While this may provide comfort to trustees, it can be difficult to understand how the Consumer Duty rules translate into improved day-to-day outcomes for their members after a buy-out, and whether these improvements will be maintained long into the future.

This is the first in a series of articles in which we will consider the challenge faced by trustees, before proposing how we as an industry can work together to make sure members are well looked after long into the future.

Even before looking to the future, defining and comparing service quality across insurers today is not straightforward. Trustees and advisers can find it difficult to compare insurers on a genuinely like-for-like basis. Some service metrics are relatively objective – call handling times, complaint volumes, turnaround times for quotations – but others are inherently subjective, such as tone of communications, empathy in bereavement cases, or how non-standard queries are handled.

Service offerings from insurers are also continually changing. Investment in technology, changes in administration models, decisions to outsource (or bring in-house) operations and M&A activity can all impact the member experience. As a result, past performance is not always a reliable guide to the future.

There is also the question of how the current service provided by a scheme’s administrator compares with that of the insurer. For some members, moving to an insurer will represent a clear and welcome improvement in service. For others with strong, responsive administrators, digital access to benefit information and quotes 24/7, the experience may feel like it has stepped down, regardless of which insurer is chosen. Trustees must grapple with this reality when considering how “good” member experience really will be for their members, in relative terms.

Trustees will typically try to reassure members that there is no immediate impact to them, beyond the improved security of benefits, and that they can continue to contact the scheme administrator and access their benefits without change. However, the buy-in phase can bring significant changes to the manner and speed with which member option quotations are calculated and provided due to the aim of ensuring all new benefits are paid in line with those insured, which the insurer has a role in calculating. This often results in longer waiting times for members to receive benefit quotations and member websites no longer functioning in the same way. Trustees are understandably reluctant to significantly change or remove this functionality in the fear of disrupting member experience at a sensitive time. However, integration between insurers’ calculation systems and pension schemes’ administration platforms is usually difficult and therefore some disruption is unavoidable, resulting in a poor first impression for members.

Buy-ins are often lengthy and complex exercises, and it can be difficult for trustees to be open about long-term plans when key details – including the eventual insurer – are not yet known (and that’s before even considering auditors’ views!). Pre-planning also has limits. Much of the detailed work required to manage the immediate member experience after the buy-in can only begin once an insurer has been selected, at which point all parties are typically keen to move quickly.

However, accepting an inability to influence member experience after wind-up does not mean that trustees should not seek information and (as far as practicable) assurance. There is a clear opportunity – arguably a responsibility – for trustees, advisers and insurers to push for clearer and more meaningful information about member experience, both as they conduct due diligence before purchasing a buy-in and for a long time afterwards. As member experience becomes more scrutinised as a criterion for trustees selecting an insurer, there is a growing call for greater transparency, more consistent reporting and a sharper focus on outcomes that matter to members.

“Trustees cannot reasonably be expected to approve every document that may constitute marketing without becoming embedded in the operational activities of the scheme proprietor, which risks compromising their independence. The trustee role should instead focus on agreeing core messaging principles within a clear policy framework and seeking assurance that these are being followed in practice. Similarly, in meetings with employers or prospective employers, discussions will inevitably cover scheme design, return targets, investment strategy and oversight. In that context, drawing a clear distinction between legitimate governance dialogue and what could be interpreted as promotion may prove challenging.”

It’s another big week for UK investors, led by miners, with Rio Tinto expected to report a strong finish to the year after record production across iron ore, copper and lithium. Cash flow may look lighter thanks to heavy investment, but firmer commodity prices and a clearer path into 2026 should keep the focus on what comes next rather than what’s gone. Anglo American’s results should look more mixed, with better iron ore offset by weaker copper and a sharply reduced dividend putting the outlook under the microscope. Shifting to the defence space, BAE Systems reports with strong momentum, a bulging order book and high hopes that rising global defence spending can keep growth ticking over into 2026.

US markets are closed today, and that may be a welcome relief to many, after last week was once again dominated by violent swings linked to AI. Some stocks are flying, and others are getting crushed in moves that often feel disconnected from fundamentals. Power and utility names were the clear winners as investors bet they’ll be essential to the AI build-out, while anything tied to data or software found itself in the firing line. Away from the AI noise, falling bond yields and softer inflation offered some relief, but a few worrying signals around growing loan defaults were one reminder that not everything under the hood is improving.

Oil prices were steady this morning, with Brent hovering around $67.70 a barrel, as investors juggle rising geopolitical tension against a market that still looks well supplied. Talks between the US and Iran resume tomorrow, keeping traders on edge given the risk of escalation, while fresh Russia-Ukraine discussions are unlikely to unlock much extra oil anytime soon. Even so, prices are struggling to lift as OPEC+ debates adding more supply and the IEA flags a growing surplus and softer demand growth ahead.”

This transaction demonstrated strong alignment between M&G, the Trustee and their advisers, enabling a smooth execution of the buy-in, in line with the Plan’s timescales. A key part of the Trustee’s decision-making process was focused on M&G’s ability to deliver excellent member experience and administration. M&G tailors solutions to the specific needs of clients by offering the option of residual risk cover, which formed a key part of this transaction.

M&G is a founding member of the BPA market and has a strong track record in pension risk transfer, backed by a robust balance sheet and commitment to customers. M&G continues to strengthen its position through product innovation, further differentiating its product suite, and supporting long-term growth in the BPA market.

LCP acted as lead transaction adviser for the Plan with Osborne Clark providing legal advice to the Trustee. CMS provided legal advice to M&G.

Rosie Fantom, Head of Bulk Annuity Origination & Execution at M&G, said: “We are pleased to have partnered with the Trustee and worked with LCP to deliver a smooth and timely buy-in for the Plan. This transaction highlights our ability to work flexibly with clients and provide exceptional member experience, something that is becoming ever more important given the increased funding level of schemes.”

Sarah Leslie, Director at ndapt and the Plan’s newly appointed Chair of Trustee, said: “The Trustee and Senior plc worked diligently to complete this transaction with M&G, providing greater certainty for members. This was a key de-risking milestone for both the Plan and for Senior plc. The Trustee were impressed by M&G’s approach and confident they will provide strong support during this next phase of the Plan’s life and in continuing to serve the members. The process ran smoothly and the highly collaborative approach between M&G and the Plan’s advisers was instrumental to ensuring a successful transaction.”

David Fink, Partner at LCP said: “It was a pleasure to support the Trustee on this significant transaction and achieve an excellent result for all stakeholders. The success of this transaction was driven by strong alignment between the Trustee and Senior plc, M&G and advisory teams and a shared focus on delivering certainty and a positive experience for members.”

But despite low use of advice, new research by retirement specialist Just Group highlights the significant proportion who would welcome a referral to a financial adviser if they were considering their own options for care in old age.

Overall, six in ten (59%) of over-45s said they would be grateful for a referral to an adviser by their local council, with another 13% saying they would contact their own adviser. Among those who had previously organised care for an elderly relative, 66% said they would be grateful for a referral and 15% said they would contact their own adviser.

The figures – the latest in a long-running research series for Just Group’s annual Care Report – show strong demand for professional support that currently isn’t being met, raising questions about whether advice firms can better integrate long-term care planning into their wider retirement advice.

Mitch Miller, Senior Care Product Manager at the retirement specialist Just Group, commented: “Care represents a huge, and difficult to manage, financial risk to clients. Many find themselves with caring responsibilities for elderly parents or relatives with some ultimately needing to organise and pay for care for themselves or their partners.

“Currently financial advisers are not front of mind when people start looking for support and guidance for their later-life care planning but our research shows that, when prompted, most people are open to professional help to discuss their options.

“The earlier the care conversation happens, the better. It means people won’t face a sudden shock at the point-of-need and will have a plan in place to deal with the financial and logistical practicalities, which is helpful when managing the emotional stress associated with finding care.

“Advisers who have developed the required skills and qualifications are in a strong position to become the ‘go to’ experts in what is likely to be a growing business area in the years to come.

“It’s very important the advice community understands the regulatory and practical issues of entering this market. Vulnerability training from providers like Just Group and support from organisations like SOLLA are an excellent way to start to understand the opportunities and challenge this market offers.”

The data comes from the latest survey by Go.Compare home insurance, which asked respondents about their financial challenges over the last 12 months. Just over a third (37%) indicated that they’re struggling to meet essential costs (rent, mortgage, utilities), with around a quarter (24%) having difficulties paying utility bills. One in 10 said they are facing challenges with rental fees, while 5% are struggling with mortgage repayments.

As a result, just over two thirds (67%) said that they have had to cancel or reduce some of their regular payments. Around a third (32%) have cut or paused savings contributions and almost one in 10 (9%) have scaled back pension payments. Streaming subscriptions have also been cancelled or reduced by 30% of adults, while one-fifth (20%) have reduced spending on internet, TV, or phone packages.

Those on lower incomes appear to have found things especially difficult, based on the data. In total, 88% of households with an income of £25,000 or less said they are being impacted by high living costs - more than half (56%) of which said they are worse affected than last year. They were also the most likely to have difficulties paying utilities and rent.

That said, the figures suggest it’s not just those on lower incomes who are struggling. Of the homes with an income around the national average (£37,000[6]), 91% said they feel they are being impacted by high living costs (household income of £35,001 - £45,000), indicating that homes of varying income levels are struggling to make ends meet.

Parents are also facing significant challenges, with 91% of those with kids stating they have been impacted by high living costs over the last year, compared to 82% of those without.

Nathan Blackler, home insurance spokesperson at Go.Compare, said: “The country has been struggling with especially high living costs for years now and our figures suggest that things are getting worse rather than better for many households.

“It’s not just those on lower incomes who are finding things difficult, either, as many of those earning around the national average indicated that they’ve been struggling too. Many have had to cut back on things like savings and pension contributions as a result, so the current crisis could have a long-term impact on the nation’s finances.

“If you’re struggling with rising costs, don’t be afraid to seek financial support. Speaking to Citizens Advice can be a good way of doing this, as they will be able to explain what options are available in your circumstances. Be sure to look after your mental health, too. Money worries can put a big strain on your wellbeing, so it’s worth speaking to your GP if things are beginning to get too much.”

As well as cutting back on other household essentials, one in nine (11%) reported cancelling or reducing their home insurance cover - a potentially costly decision in the long run.

Nathan added: “While it’s understandable that households will be looking for ways to cut back in the current climate, cancelling home insurance should be a last resort. Abandoning your cover could end up costing you more in the long run as you often have to pay a cancellation fee to do so, and you could be left short of funds if something is stolen or damaged.

“If you’re struggling to pay your home insurance, consider comparing policies to see if you can find a cheaper deal when you come to renew. Joining a Neighbourhood Watch scheme and raising your voluntary excess can also bring down premiums, although be careful not to raise it so high that you’d be short of funds if you’d need to claim.”

This chasm is widest across personalization, data infrastructure, scaling AI, and underwriting transformation. These are the four areas where the disconnect between investment and impact is most pronounced.

The execution gap is stark. Two-in-three (67%) younger consumers want phygital engagement that blends physical and digital touchpoints seamlessly, yet only 16% of insurers offer truly integrated capabilities. Similarly, only 36% of carriers provide flexible premium models that adapt to changing life circumstances. This isn't just a life insurance story – the shift spans property and casualty, health, and beyond. Many insurers say today’s customers expect more personalized and relevant experiences. When protection flexes to real moments, insurers win on relevance, not just rate. Therefore, insurers redesigning products around life-stage needs rather than static coverage are capturing a disproportionate share of young customer growth.

The payoff for getting it right? Significant. Seventy percent of insurers report improved retention rates when they integrated customer service insights across functions. One global life insurer we studied unified customer data and transformed operations: as a result, campaign retargeting dropped from one day to five minutes, quote generation increased 60%, and email open rates lifted 24%. Dynamic pricing, customizable add-ons, and tailored experiences all require federated data ecosystems and enterprise marketplaces that enable real-time decisions.

The harder half isn't technology deployment – it's process redesign. You can't bolt AI onto legacy processes and expect enterprise-wide transformation. We hear insurance leaders cite regulatory and compliance concerns as their biggest adoption constraint. That caution is warranted, but it often masks a deeper challenge: redesigning how work actually happens.

Real impact emerges when AI is embedded across processes, systems, and operating models turning data infrastructure into tangible customer outcomes. The insurers reporting improved underwriting outcomes through advanced capabilities didn't just invest in technology; they leveraged these capabilities to address critical underwriting gaps while optimizing exposure management.

Here's the opportunity: eighty percent of insurers recognize the need for real-time, dynamic underwriting, yet only 11% have the maturity to execute it. That 11% have built the foundations that we've discussed – unified data ecosystems, AI deployed at scale with redesigned processes – and they're now capturing the pricing advantage through demonstrated loss prevention capabilities. Advanced risk mitigation means actual prevention: better risk selection, proactive policyholder engagement, data-driven loss control. Intelligent platforms, predictive analytics, and advanced risk models are redefining how risks are assessed, priced, and managed.

The US President has announced the repeal of a scientific finding that greenhouse gas emissions endanger human health, removing the legal basis for federal climate regulations. This effectively ends CO2 regulations for new vehicles, adding further confusion for automakers. They have invested huge sums in advancing EV manufacturing, but this abrupt gear shift now throws a cloud of uncertainty over future investment plans.

The FTSE 100 looks set for a cautious start to trading in a volatile environment. Investors are looking ahead to an inflation reading due in the US, as they also try to assess the longer-term impact of AI disruption. CPI data is expected to show that headline inflation ticked up slightly to 2.5% year-on-year. A stronger-than-expected jobs report has pushed expectations for a Fed rate cut back to the summer. However, with artificial intelligence set to create huge upheaval across industries, it could ultimately exert downward pressure on prices.

Concerns that AI will be a job killer, eliminating roles across multiple sectors, are spreading. In an era of super-high valuations, something had to give. Tech giants have been propelled skyward on expectations that AI investment would revolutionise industry and society, delivering dramatic efficiencies in the world of work. Now, reality is dawning about just how disruptive this transformation may be. Real estate companies are the latest to feel the pain, as investors reassess future demand for office space if AI tools replace large parts of the workforce.

Jitters are also emerging about whether the tech industry can live up to its promises, given intense demand for memory and data storage. Networking company Cisco saw its shares dive 12% after warning that the outlook had become more uncertain.

The sharp falls across multiple sectors saw investors pull cash out of safe havens to cover losses. Gold and silver suffered steep declines amid the volatility but are now recovering. There is an ongoing flight from the riskiest assets, with the crypto winter deepening once again. Bitcoin is now trading around $66,000, down 46% from its peak last summer. Given that past crashes have seen the cryptocurrency fall by as much as 75%, there are fears it may still have further to slide. It has hardly been praised for reliability or stability-qualities that are very much in demand right now.

Trust is going to be even more valuable in the new AI world. Relationships built up with brands over many years will be harder to disrupt. But it is becoming clear that to remain resilient, companies need to accelerate AI adoption, otherwise disruptors will have a much greater chance of wreaking havoc on traditional business models.’’

What are we missing? Where could our assumptions fail? Are we prepared for the next disruption – not just the last? Is our strategy resilient? 80% of respondents to WTW’s Emerging and Interconnected Risks Survey said “no” when they thought about the next 10 years.

To answer these questions, leaders are embracing scenarios in their many forms to clarify decisions, challenge comfortable assumptions, test their strategy, inform insurance purchasing, strengthen resilience and improve capital planning. Respondents emphasized the power of scenarios, seen as “more useful than data to determine appropriate responses strategies.”

Scenarios are not a new tool but their inherent strengths in adaptability and ability to handle complex interactions make them perfectly suited to respond to three key drivers:

With more leaders turning to scenarios for answers, it is essential to challenge what they are and how best to use them. In this insight, we examine:

A scenario, in its proper form, is a structured exploration of a plausible future operating environment. It combines a clear narrative of how conditions change under stress with the data, models and judgement needed to quantify the implications. It shows not just what could happen, but how events evolve when pressure points appear and which decisions matter most under that future.

What makes scenarios so powerful in risk analysis is their ability to reveal asymmetries. You often discover that the organization is far more exposed to one type of change than anyone realized – and surprisingly resilient to another. This reframing is often the turning point. Scenarios stop being paperwork and become powerful tools for addressing strategic questions.

Among the most common diagnostic, are:

These questions promote a mindset of preparedness and adaptability, encouraging organizations to anticipate challenges before they arise instead of reacting after the fact.

Scenarios can come in many forms. They may present as in-depth reports, executive summaries, slide decks, or risk indices - all with extensive background research, subject matter expertise, and client communication at their cores. The end use determines the design.

Each of these pathways may require a different delivery method.

Table 1. Examples of scenario use-cases

The strongest scenarios share several qualities:

As you consider your risk and strategy actions for the year, consider where scenarios can add value by stress testing the question you’re looking to answer.

“What could happen?”

“What if...?”

“How fast is too fast?”

“How might we respond?”

“How can we capitalize on this?”

In future articles we’ll explore what types of scenarios to use to answer each and share best practice. We will also be publishing a new series of scenarios to illustrate those best practices.

According to the Insurance Fraud Register, insurance fraud has now led to an average increase of £50 on consumer annual policies - while the average cost of a fake claim has now hit £84,000, with one in seven claims proven to be fraudulent, according to Adyen.

To expose how easily the human eye can be fooled, SAS asked generative AI to create doctored insurance images. Two of the three images below are fake, but are you able to tell which ones?

Answers

At first glance, Image 1 appears to be a perfectly ordinary collision scene. In reality, the entire photo is synthetic, created using a prompt for a collision on a suburban English street.

Image 2 looks even more convincing, and the image of the yellow car is real. But bystanders have been removed, number plates have been altered, and the digitally added windscreen damage is all the work of AI. By erasing contextual clues - like people and surrounding cars - fraudsters can remove the very evidence insurers rely on.

Adam Hall, Insurance Fraud Specialist at SAS, said: “Fraudsters are exploiting generative AI tools to make fabricated damage and doctored scenes look entirely plausible. With just a few prompts, they can create, enhance or erase visual evidence to support a false insurance claim.

“People should look for subtle inconsistencies - shadows that fall the wrong way, damage that doesn’t match the impact, blurred number plates, or backgrounds that appear too clean or empty. These tiny visual mismatches are often the first red flags of an AI-generated claim.

“But AI isn’t just empowering fraud - it’s also helping insurers fight back. AI and machine learning can detect both one-off scams and sophisticated, organised networks. By analysing huge volumes of claims data, AI can be used to reveal anomalies and patterns that humans simply can’t - reducing losses, improving accuracy, and safeguarding customers.

“As fraudsters adopt new techniques - fake identities, forged documents, digital-first scams - AI evolves too. It can review and retrain models, absorb new data sources, and deliver more accurate risk scoring to keep insurers one step ahead.”

Readers can see the full report here.

US markets looked flat on the surface, but beneath the calm, it was a volatile session, with solid breadth in the S&P 500 masking weakness in the tech-heavy Nasdaq. This is 2026 in a nutshell: blink, and you’re punished, as perceived AI disruption continues to separate winners from losers. Shopify fell close to 7% in a wild swing from +11% pre-market as investors continued to fret about its place in the AI pecking order. Financials stayed under pressure, but capital goods shone, with Caterpillar and Deere pushing fresh highs on a strong jobs report that pushed rate-cut hopes further out.

Oil prices pushed higher again, with Brent hovering around $70 a barrel, as geopolitical nerves around US-Iran tensions continued to do the heavy lifting. Talk of diplomacy has done little to calm traders, who remain focused on the risk of supply disruption, even as OPEC stuck to its demand forecasts and signalled no change in its supply stance. That said, the rally is running into resistance, with US inventories jumping sharply and the IEA likely to remind markets that a global surplus is still lurking in the background later today.”

However, with yet another big name turning private, it will be a blow to the London Stock Exchange. With global whales swallowing big fish in the UK pond, it limits the availability of listed assets for funds. This is partly why private market opportunities are increasingly attractive, given that opportunities to invest in listed companies are declining.

This will go down as a week of huge upheaval for the UK asset management landscape, with this mega deal arriving just as valuations had taken a hit over worries about AI disruption. This takeover demonstrates the allure UK assets hold and has helped boost shares in other wealth managers and banks. There’s also been a fair amount of bargain hunting after yesterday’s dramatic falls.

A reassuring update from RELX, which was hit by the sell-off on Tuesday, has helped sentiment. The global analytics provider saw operating profit rise 9% and said its integration of AI tools across its business would be a big driver going forward, shaking off worries about disruptors eating into its revenues.

Given its international focus, the Footsie’s performance appears increasingly divorced from the lacklustre record of the wider UK economy. Growth again disappointed, with GDP in December coming in at 0.1%, undershooting expectations of 0.2%. This was not a late Christmas present Keir Starmer wanted to unwrap, especially given all his political troubles. This uninspiring reading of his government’s handling of the economy won’t help his efforts to cling on as Prime Minister.

There are glimmers of hope, given that the construction sector continues to be a drag and planning reforms are expected to revitalise activity. Plus, an uptick in consumer confidence should show up in higher spending patterns. But the government’s big push for growth so far has come across as a weak effort.”

Including, decisions within multi-employer pension schemes to consolidate assets within a smaller number of default arrangements. This concentration of assets can improve performance by making new asset classes available, and larger schemes stand to benefit from better governance

The DWP has recently launched a consultation which is looking to take stock of the current trustee landscape and consider how it needs to evolve when it comes to the governance of both defined benefit and defined contribution pension schemes - schemes that currently invest £1.5 trillion, for the benefit of over 40 million members.

Professionalising trusteeship is one route the DWP sees as part of the solution, and something that may happen organically as we see greater consolidation of single employer trusts and smaller master trusts, into larger more professionally run pension schemes. The DWP recognise the benefit of this approach, but also the risks around a concentration of governance within a relatively small number of trustees.

The introduction of graduate training programmes by professional trustee firms is also encouraging, helping to establish trusteeship as a viable early career path, rather than something taken up only later in working life. Professionalisation isn’t the only answer, however. The best trustee boards are those with a mix of skills, knowledge and experience, including hard and soft skills that may take time to develop. The wider experience that lay trustees can bring to a board should not be overlooked, while member representation is one way to ensure that scheme members have a voice.

The pensions industry is going through a significant period of change which trustees are having to navigate. Regulation will introduce new market dynamics, mergers and acquisitions, the incorporation of new asset classes, and the development of new retirement income solutions. Outside of regulation the growth of artificial intelligence may provide opportunities or fresh challenges to trustee boards.

Another very real risk identified by the DWP consultation reflects the age demographic of trustees, with statistics suggesting that 85% of trustees may be planning to retire within the next 3 years. Succession planning, upskilling and recruitment have never been more important.

This potential mass retirement of trustees represents both a challenge and a rare opportunity to ensure that trustee boards reflect the members whose savings they steward.

Ultimately, effective trusteeship depends on diversity of thought. A board that brings together different perspectives, professional backgrounds and lived experiences is better placed to challenge assumptions, spot risks, and make decisions in members’ best interests.

Our industry needs trustee boards that are fit for the future, ready to guide members through change, and capable of delivering for the full breadth of society.

M&G’s strong proposition was well received by the Trustees, which recognised M&G’s ability to insure and administer the Plan’s complex benefit structure. They also valued the enhanced level of support M&G could provide to the Trustees in the ongoing management of the Plan, ultimately allowing members to continue to benefit from an excellent member experience.

The Trustees were advised on the transaction by WTW as risk transfer adviser and scheme actuary, CMS as legal advisers, and SEI as investment adviser.

Rosie Fantom, Head of Bulk Annuity Origination & Execution at M&G, said: “This transaction marks an important step in securing the future benefits of over 3,000 Plan members. It highlights our ability to deliver tailored solutions for complex schemes and reinforces our focus on providing certainty and confidence for trustees and members alike.”

Michelle Parczuk, Chair of Trustees and Chief People Officer, Avon, said: “The Trustees are delighted to have partnered with M&G to complete this transaction. This buy-in helps to provide greater certainty to members about the security of their benefits and represents a pivotal moment in the Plan’s de-risking journey. My thanks to everyone involved for a great team effort in making this happen.”

Gemma Millington, Senior Director, WTW, said: “It was a pleasure to work with the Trustees, Avon, M&G and the wider advisory teams to deliver the transaction objectives. In particular, the Trustees were focused on ensuring the buy-in achieved an optimal outcome for members, including the preservation of all member options and coverage of complex Plan benefits. We’re seeing strong market competition delivering attractive pricing and pushing insurers to continually improve member experience.”

Andy Lewis, Partner at Sackers commented: “The new DC VFM framework is intended to shift focus away from costs and charges to a more holistic assessment of overall value for money. The ultimate goal is to improve member outcomes. Feedback on the new framework suggests there is still some work to do to persuade both the industry and pension savers that the proposed VFM framework will achieve this.

“The consultation sets out an extensive set of required metrics for assessing value, some elements of which could be interpreted in different ways, while other aspects will be intrinsically hard to quantify. Alongside conducting a rigorous assessment of their VFM, schemes will also have to report transparently on the results and, where applicable, take prompt and specific action if their scheme is not up to scratch.”

Lewis continued: “With VFM assessments scheduled for 2028, it is important that schemes and service providers take steps now to ensure they are well placed to carry out the first VFM assessment and achieve good ratings. The consequences of not providing VFM are significant. Underperforming arrangements falling into the ‘not value’ amber and red categories will be required to take corrective action or, in some cases, exit the market altogether. Early warning of potential assessment outcomes will therefore be vital, as the available timescales for fixing things are likely to be tight. In contrast, for those DC arrangements that do perform well, achieving dark green or green ratings, the framework may provide some external validation.

“In principle I think we can all accept that a more rigorous, systemic and transparent framework for assessing overall VFM in DC schemes is a positive development. But this will inevitably entail a lot of implementation work for the industry, the cost of which could be significant. Also, with the VFM framework designed to be technical and data driven, the detailed metrics rules within the framework are critical. There is a risk that these could leave little room for other important scheme attributes to be taken into account – such as good governance because they are currently more difficult to quantify. There is a delicate balance to be struck here, and our survey suggests some mixed views on the current proposals. So, as the current consultation moves forward, it could be useful for all of us to keep in mind the challenge of ensuring that the final framework will produce results that are genuinely useful for schemes, employers, the industry and pension savers. For the cost and time commitment required from the industry, some people are already asking whether VFM itself runs the risk of not being ‘value for money’.”

The consultation will close on 8 March.

At the same time, intensifying competition in the bulk annuity market means pricing is increasingly driven by other factors – leaving credit as just one small piece of a far more complex equation.

"Insurer pricing is increasingly driven by other factors – leaving credit as just one small piece of a far more complex equation."

Much has already been written about what Warsh may or may not think. Our view is that some of the initial assumptions may prove incorrect and that there is likely to be more nuance to his thinking, given Warsh himself has made very few public comments on monetary policy in recent times.

Nonetheless, until we get a clearer steer from Warsh on how he views the current stance of US monetary policy, the factors below are the most relevant for portfolio positioning.

What we need versus what we may get

We see the need for further easing in the US economy as limited. Growth is healthy and downside risks to the labour market, which were visible in the second half of 2025, are now diminishing.

Nonetheless, what the economy needs and what policymakers deliver aren’t necessarily the same. Though Warsh has shown himself to be independent minded, it seems unlikely the role would be given to anyone who did not make a compelling case in interviews for why policy rates could be lowered further. We think the administration would like rates to move towards 3%.

Warsh is far less likely than some alternative candidates to desire aggressive rate cuts far below what is needed. Simultaneously, however, as an astute political operator with prior experience of how the Fed functions, in our view he is better able to deliver moderate further easing than some of his rivals.

Changing the longer-term Fed architecture

We believe his views on balance sheet policy are more nuanced than the early market narrative. Immediately following the news of his nomination, yields of long-dated bonds climbed amid an assumption that Warsh would plan to shrink the Fed’s balance sheet. Although he is likely to favour a smaller and cleaner balance sheet over time, we see this as a long-term objective and highly doubt it would be implemented in a way that seriously disrupts the US Treasury market. Why would he?

Instead, we believe his caution towards balance sheet policy reflects a longer-term desire to:

While (b) will raise concerns around “fiscal dominance” of the central bank, we are not instinctively opposed to a more holistic approach to policymaking across government functions – it could help it function better.

As an example, if in the longer-term the Fed were to allow its longer maturity US Treasury holdings to wind down, but with regulatory changes creating offsetting increases in demand for these assets, this isn’t necessarily a bad policy.

Could there be changes to the Fed’s policy framework?

We will be watching closely for any changes Warsh may propose to the Fed’s monetary policy framework, particularly with respect to the labour market. This is crucial for bond investors. Congress mandates the Fed’s objectives of “stable prices and full employment”, but it is the Fed itself that interprets them – for instance, by defining “stable prices” as 2% inflation.

To maintain a dovish tilt while retaining credibility, one could argue that “maximum employment” implies a lower unemployment rate than the Fed’s current “natural rate” estimate of 4.2%. All else being equal, a lower assumed natural unemployment estimate would call for lower policy rates (reasons could include the structural change of AI adoption or the 2018 example of unemployment below 4% with very muted wage pressures).

We await further evidence that Warsh is thinking this way but some of his comments on AI and productivity as disinflationary forces hint at it.

What does this all mean for portfolios?

This, of course, is the important bit. We retain a moderately bearish view on US duration (interest rate risk), reflecting a still strong growth outlook, signs of stabilisation in the labour market and fiscal support feeding through to the economy in 2026.

However, given that we expect Warsh to both want and be able to deliver further rate cuts, we believe the scale of any sell-off is likely to be limited. We would turn more constructive on US duration if markets were pricing one cut or fewer for the remainder of 2026, but we are not there yet.

We see the long end of the bond market as remaining vulnerable to fiscal indiscipline, but yields have risen there since the Warsh announcement, as markets have extrapolated his historical balance-sheet views into future policy as weighing on long-end demand. Again, we are not there yet but if this dynamic continues it will provide attractive opportunities- 30-year yields above 5% would make valuations much more compelling.

Our regular authors are in attendance including a new interviewer in our Lights, Camera, Actuary feature from Bolton Associates as Rupa Pithiya interviews Howard Dale, an actuarial independent consultant, on how his career path moved into his current role.

We look forward to welcoming you back next month.

Japan’s electorate braved blizzard conditions to give Prime Minister Sanae Takaichi’s Liberal Democratic Party more than a two-thirds majority in the Land of the Rising Sun’s powerful lower chamber. Her spend big and tax low approach has gone down well with stock markets, with the Nikkei crossing the 57,000 barrier for the first time before pulling back a little. That puts pressure on productivity and economic growth to do the heavy lifting when it comes to balancing the books. Japanese inflation is nearly at the Bank of Japan’s target level of 2% but there are concerns that too much stimulus could see price increases accelerate again. The interplay between Governor Kazuo Ueda, and the newly emboldened premier will be the key dynamic to monitor, but markets look to be anticipating some pressure on state finances, with both the Yen and prices of government securities under pressure after the result.

US stock futures are little moved today after US stocks ended the week just about flat, but it was far from an even outcome, with concerns about ballooning capex on AI, and threats to traditional operating models dragging on tech stocks.

The software sell-off wasn’t isolated either, with UK software & analytics companies also suffering. A shake out isn’t always a bad thing, and for investors prepared to see through the noise, quality names such as the London Stock Exchange Group and RELX (Hargreaves Lansdown stocks to watch for 2025 and 2026 respectively) there’s the potential to gain exposure to some quality names at relatively low multiples.

When disruptive technologies develop at pace, there’s always some fallout, but those that grasp the nettle and deploy game changing technology at scale can go on to create huge wealth. Ford’s invention of the assembly line in 1908, and decision to double factory worker wages was seen as reckless by some at the time, but it went on to dominate the US Motor Industry for another 20 years. Those companies ploughing 12 figure sums into AI infrastructure will be hoping for a similar success story. But unimaginable step changes in productivity and the arrival of science-fiction like technological capabilities could herald inflection points for other industries too. Tourism, retail, defence and the energy industries, to name but a few, were transformed by the mass adoption of the motor car and industrial manufacturing. AI could well be heralding a similar, if not bigger, paradigm shift.

But the long-term is a series of short-terms, and markets will be keeping a close eye on US CPI inflation due at the end of the week. January’s annualised price increases are expected to fall from 2.7% to 2.5% but that’s been aided by falling oil prices. Core inflation is expected to remain steady at 2.6% and unless that starts to nudge down, we may not see another rate cut during the final months of Jerome Powell’s reign at the Fed, even if the labour market tightens further. Unemployment figures are also due this week and are forecast to remain steady at 4.4%.

Brent crude prices are down around 1% to about $67.2 per barrel, extending weekend losses seen after Saudi Arabia dropped its selling prices on oil exports to Asia for the fourth month in a row. That’s shifted traders’ attention away from tensions between Tehran and Washington, back to concerns about an oversupplied oil market, despite fresh sanctions on Iranian tankers following talks on Iran’s nuclear future in Oman on Friday.”