The Loop | September 2021

September 2021

Your quarterly insight to the pensions world from the team at The Pension Solutions Group and PSG SIPP

Pension Awareness Week Ensuring a healthy fund for retirement

Inside this issue

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Commercial property in a pension

Is it like Tough Mudder?

Why bigger isn’t always better

Busting common pension myths

and much more...

It’s pension awareness week. In this edition of The Loop and elsewhere, TPSG and PSGS are supporting our industry to raise awareness of the importance of saving enough for retirement.

In this issue Feature and Insight Who’s sitting pretty?

Feature and Insight Pensions awareness week: Why saving early is key Industry Insight Pensions awareness week: Mind the gap

Get to know Jose from CMD Recruitment

Expert Q&A Taking our service to the next level

Industry Insight Investing in commercial bricks and mortar

Industry Insight Is it like Tough Mudder?

Company News Introducing our charity of the year

Mythbusters Bright Spark & Mr Knowitall

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PSG SIPP Limited Registered in England and Wales no. 07030395 Registered Office: The Coach House, Box House, Bath Road, Box, Corsham, Wiltshire, SN13 8AA is authorised and regulated by the Financial Conduct Authority (register number 514654). | The Pension Solutions Group Limited Registered in England and Wales no.

06683561 Registered Office: The Coach House, Box House, Bath Road, Box, Corsham, Wiltshire, SN13 8AA. | The PSG Trust Company Limited Registered in England and Wales no. 06289058 The Coach House, Box House, Bath Road, Box, Corsham, Wiltshire, SN13 8AA.

I am lucky to work somewhere where gender isn’t a barrier to progression. At PSG the door has always been wide open for talented women to come in and enjoy real equality while building a career, regardless of any other commitments they might have.

That’s one of the reasons why it’s so shocking to be reminded of the disparity between men and women in the workplace, or in sport, and even in pension provision. One of the other reasons being it’s the 21st century – come on guys!

We’ve timed the publication of this edition to coincide with Pension Awareness Week. The mere fact that pensions aren’t exactly the raciest of subjects, is part of the reason why the industry - why the public - need this focus. We want to give a shout out to Pensions Geeks, Now:Pensions, Henry Tapper and all the others campaigning for transparency, fairness and engagement, for the brilliant work they continue to do by talking about pensions objectively and plainly.

You should be used to our style by now and know that we always like to put our own spin on any topic and Pension Awareness is no different. In this edition of the Loop, we approach this subject from a ‘pensions savvy’ perspective. There’s some sobering, disappointing, and frankly depressing statistics out there and you’ll find a few in here too. But, let’s also talk about awareness in terms of being aware of what pensions still offer the business owner, how they can provide a prudent method of asset ownership, their place in succession planning, IHT management and plenty more besides.

Natalie Pike COO, TPSG & PSG SIPP Limited

It’s so shocking to be reminded of the disparity between men and women in the workplace, or in sport, and even in pension provision.

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Feature and Insight

Who’s sitting We wanted to share with you some pics of our extended TPSG/PSG family– they have all taken part in meetings in one way or another before, during and after lockdown.

Enjoy!

Coco (Alecia’s dog)

Bolle the Romanian rescue (Molly’s dog)

Zelda (Marcus’ cat)

Meg (Mike’s dog) Jelly and Patches (aka Jeliphant and Pa-cheeeeeeeeeese Gromit).

(Maria’s cats)

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pretty?

Eddy the British Bulldog’s first trip to the beach (Bethany’s dog)

Snowy (Pearl’s cat)

Wally the Cookapoo (Nat’s dog)

Freya & Briar the Borders and Lunar the Degu (Eleanor’s furry friends)

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Feature and Insight

Pension awareness week:

Why saving early is key

By Marcus Forsey Marketing and Communications Manager marcus@psgsipp.co.uk

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The global pandemic has had many adverse effects on the state of the nation’s finances, particularly for young people.

Although in many ways it has been widely recognised as a huge success in protecting jobs, the Furlough scheme has required many people in the UK (especially those in their 20s who were disproportionally affected by job security during the pandemic) to become accustomed to living off 20% less of their take home pay. Since the government introduced changes this year to the amount it will pay in the scheme until it’s eventual demise, this has since increased to 30% from 1st July.

Naturally this has led many younger people to seek ways to maximise their take home pay. Saving for retirement during this time has become something many younger generations have had to reconsider by either reducing the amount paid into a pension or choosing to stop contributions all together.

Having readily accessible cash has obviously been a life saver for many people during this time and has been equally as important, if not more, than saving for retirement. But what are the implications of not making regular contributions to a pension?

The effects of compound interest By not making contributions as early as possible, younger people miss out on the benefits of compound interest and long-term growth to make their money work harder for them until they retire.

Take for example an assumption of a 5% annual return, investing £200 a month from the age of 25 with no existing fund value. This will give you £96,000 towards your retirement. The same pot can be achieved by saving £400 from the age of 45. However, the effect of compounding interest has longer to work from age 25 so it will leave you with a pension pot almost twice as large.

Saving early is key

AGE 25

30

35

40

45

50

55

60

65

£210,476 £96,000

AGE 25

30

35

40

45

50

55

60

£96,000 So saving early really is key

With the new state pension currently capped at £175.20 per week and expected to grow by just 2.5% annually, growing a healthy pot couldn’t be more important for those who someday dream of living comfortably in their silver years. To keep up with the cost of living, it is recommended that a person at the age of 68 has a fund value of 7x their annual household income in their pension pot in order to maintain a similar standard of living as in their working life (assuming an average household income in the UK with typically two working adults and two state pensions).

There’s really no denying that saving early can provide a much more comfortable and rewarding retirement.

Sure, making regular payments into a pension throughout the past 18 months has certainly had to take a back seat for many who have had to become accustomed to a drop in their income.

But as we begin to enter some form of normality, it should once again be top priority for anyone looking to ensure a happy and healthy retirement.

£306,476

65

£69,098

How much should you save

Total pension pot

Total pension pot

£165,098

Myth: The state will provide for me The new state pension pays £175.20 per week, or £9,110.40 per annum.

This is unlikely to provide a decent retirement income for even a very modest standard of living for a single person. Depending on your working history and if you’ve kept up your National Insurance contributions, you may find you do not fully qualify for the full amount.

References Coronavirus Job Retention Scheme statistics: July 2020 Saving for retirement in your 20s and 30s The basic State Pension THE LOOP | SEPTEMBER 2021

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Industry Insight

Pension awareness week:

The Gender The amount women over 55 have saved into a pension compared with men continues to widen in the UK. Here are some alarming statistics.

gap The gap between men and women’s average pension pots has increased by this amount in the past year alone

The amount women are missing out on compared to men in retirement

Despite this, women contribute a larger percentage of their income to their pension pot

8.3%

Women would have to work this much longer than men to catch up with their savings

9.4%

Myth: Having children creates the gender pay gap and pension gap Figures from the Department of Education show the gender pay gap often starts long before women have children. Just one year after completing their education, female graduates can expect to earn £1,600 less than their male peers.

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£26,673

Average annual retirement income

£20,712 £14,964

Get to know: Jose from CMD Recruitment

“I have a great working relationship with the senior managers at PSG which is built on trust and mutual respect.

Jose Garcia-Brennan, Principal Consultant at CMD Recruitment

Our team of bright sparks are our biggest asset. They underpin our great service and make our company a success story.

Putting clients and their advisers at the heart of everything we do is second nature to every one of our staff. If you pulled a hair from each of them and put it under a microscope, you’d probably find it somewhere in their DNA. But what you may not already know about our colleagues is that many of them share something else in common. They were first recommended to us by CMD Recruitment.

CMD have been with us on our journey to a team of over 40 staff, almost since the beginning. A relationship that blossomed quickly and fell to a chance encounter between our Communications Director, Mike Baker, and Principal Consultant at CMD, Jose Garcia-Brennan (who share the same all-time top five list of drummers!).

Ever since then Jose has acted as an ambassador for our companies in the recruitment and securing of likeminded individuals that, thanks to Jose’s familiarity with our culture and understanding of our needs, almost always fit in like a new family member.

Seven years ago, during a visit to another company located in the business park that PSG called home back then, Jose knocked on our door and introduced himself to Mike. It was soon obvious that there was a meeting of minds, values and tastes which led to further meetings with both Mike and our COO, Natalie Pike, and our great business partnership began.

“I have been recruiting for PSG since 2014. It has been wonderful to play a part in their continued growth. They are a real success story, and I am proud to assist them with the building of the great team that they have.”

Jose Garcia-Brennan Ever since then, Jose has dedicated himself to working closely with our Management team to understand our business, our recruitment goals, and to get a good feel for the calibre of individuals we want to recruit, as each area of the business grows.

It’s fair to say our success in recruiting smart cookies into our team relies almost solely on Jose and his colleagues work to identify the right candidate to put in front of us. That means right for the candidate as well as right for us. Jose and the team at CMD can always be relied on to understand our culture, our ambitions and our values when recruiting on our behalf. We believe that because Jose invests the time to ensure potential candidates have as full an understanding as possible of who we are, this results in interviews with interesting people who are genuinely driven to apply for roles with us.

“I have a great working relationship with the senior managers at PSG which is built on trust and mutual respect. On top of all this, they really are all such an awesome, personable team and an absolute pleasure to work with!”

Jose Garcia-Brennan.

CMD in their own words Established in 2004, CMD Recruitment is a leading independent recruitment consultancy based in the South West of England, but with coverage across the UK. We take pride in our success at creating outstanding, long-term relationships with both business clients and candidates, which ensures we maximise the effectiveness of our recruitment consultancy service.

The team carries over 100+ years of recruitment experience and all consultants are trained to cover every discipline of recruitment, with many specialising within specific sectors such as Accountancy & Finance, Employment Related Services, HR, PA and Secretarial, Sales and Marketing, IT and Design, Engineering and Technical, Administration and Customer Service, Industrial and Driving.

To find out more about CMD Recruitment’s services, visit cmdrecruitment.com

THE LOOP | SEPTEMBER 2021

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Expert Q&A

Taking our service to the

next level At TPSG and PSG SIPP we’ve always got our eye on where we can look to make improvements. From the way we administer our client’s schemes, to the way in which advisers and their clients send us an application.

There are multiple projects running at any stage to research, plan and deliver such changes. Key to helping implement these changes is our Operations Executive, Maxine Samuda.

Maxine recently took some time out of her busy day to talk to us about some of the exciting things she is helping to deliver for our clients and advisers as well as our team.

Maxine Samuda Operations Executive maxine@psgsipp.co.uk

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“My primary objective has been to oversee the migration of our pension Administration system to Platinum-Pro, the very latest platform from Delta Financial Systems.”

How long have you worked at PSG? I’ve worked at PSG SIPP for just over 7 months, overseeing the company’s development roadmap and its ambitions to enhance the service we offer and drive forward change.

It’s been an exciting time to join the company as we look to increase our share of the UK market and to take advantage of the very latest FinTech to administer our client’s schemes.

What have you been involved in since you first joined the company?

My primary objective during this time has been to oversee the migration of our pension Administration system to Platinum-Pro, the very latest platform from Delta Financial Systems. The platform will offer our administration team greater flexibility and to help automate some of our internal processes. The migration process is progressing well, and we are working with Delta to deliver the project soon.

Once delivered, we will be looking to take full advantage of the systems capabilities and additional functionality that will give our clients and advisers wider clarity about their schemes.

I’ve also worked closely with our accounts team to update the annual

valuation process. Previously this was something which was done manually, but making use of templates and functionality readily available to us we have been able to automate some of this work.

I’ve worked alongside our Marketing and Communications Manager, Marcus Forsey, to improve the online experience for advisers accessing the literature area of our website including the ability for new advisers who have registered to conduct business with us and their teams to create logins and to make accounts which are no longer used inactive. We’re currently in the middle of testing this and hope to go live soon. Watch this space!

What are some of the business improvements you’re currently working on?

Currently I am working on a new Online Application solution which will allow us to receive new applications online and give our membesr/IFAs the abilty to submit digital signatures via the website as part of the onboarding process. Documentation including for anti money laundering purposes will also be able to be attached. Once this is available, we will be able to import

the data to our pension administration platform. I’m also co-ordinating the transfer of data feeds from the fund managers we work with so we can update valuations more frequently.

Eventually this will be something we aim to share with IFAS and clients in an easily accessible way.

What benefits will these solutions offer our team and our advisers and clients?

The annual valuation changes and increased automation has allowed the team to process these in half the time.

They have since received less queries regarding the valuation due to more information being provided. Upcoming website developments so that IFA’s can create their own accounts means they will have instant access to the website and not have to wait for the Team to create an account for them. And once launced, online applications will greatly speed up the process for IFA’s and their clients to apply for one of our schemes. All changes I am sure are going to go down well!

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Industry Insight

Between January and March this year £10.5 billion was invested Into UK commercial property. An increase of 112% year on year for this period.

Investing in commercial bricks and mortar

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By Duncan Parsons CEO, TPSG & PSG SIPP Limited duncan@tpsg.co.uk

Has the pandemic left commercial property investments in a dilapidated state?

Few elements of working life avoided change over the course of the pandemic and one of the most fundamental was where we all work.

Regular readers will know that our operations model and mindset lent themselves to the enforced shift to homeworking and that, as we emerge out of the cycle of lockdowns, we have no intention of returning en masse to the office. Good thing too, there isn’t room for all of us anymore.

So what does this cultural shift, if not entirely away from the traditional work place, then at least to a more flexible definition of what we mean by ‘work place’, mean for commercial property?

It’d be easy, and not unreasonable to assume that values have dropped alongside demand. Happily, for investors at least, this is not the case.

Between January and March this year £10.5 billion was invested Into UK commercial property. An increase of 112% year on year for this period.

There’s plenty of other evidence of the undiminished strength of this asset class too. For example 2020 experienced the highest ever take-up recorded for units over 100,000 sq ft, and quarter one of this year was 34% above the long-term average.

Commercial property, like all property really, remains one of the best investments on all fronts. The trend is always up, even if once in a while there’s a drop. The yields are rarely matched by anything else, even investments that carry significantly greater risk. Property is also reassuringly familiar. It’s real, a physical thing that we can all understand. All of this is true no matter how commercial property is owned. But it gets way more interesting when it’s owned by an entity that doesn’t pay tax.

Let’s just imagine that the sourdough you perfected in the first lockdown was so good that you went on to open your own bakery. You could rent that bakery and pay your rent, from your taxed income, to your landlord. Or, you could use tax efficient structures, such as a Small Self Administered Scheme (SSAS) to acquire the bakery. Your burgeoning sourdough empire now runs out of a property that you are still the beneficial owner of, but via your pension scheme – which doesn’t pay tax.

where IHT is concerned. In addition, capital gains tax won’t apply should you decide to sell the property, either to take benefits from your scheme, or because your business needs to expand because Waitrose want to stock your sourdough bread.

As compelling as this sounds, the pension savvy among you may be wondering how easy it is to acquire commercial property in a pension scheme these days, given things like borrowing restrictions. While it’s true that the straight forward SSAS route isn’t actually as straight forward as it used to be, there are other routes to be explored, still with a pension at the heart of it, but that come with additional benefits such as enhanced succession planning for family businesses.

We’ve all been living with varying levels of uncertainty for a while now, but it’s great to finally be taking stock of the things that changed for the better, the things that are sliding back towards the old norm and, the things that never really changed at all. While it’s not You’re still paying rent, but it’s free everyone’s experience, and as counterfrom income tax, and goes directly intuitive as it seems, I take comfort to your pension scheme. You own from the overwhelming evidence that the bricks and mortar (albeit in your property continues to be not just a pension scheme) and you benefit from safe bet, but one with an unfailing the rental payments. Another attractive track record when it comes to return facet of this ownership structure is on investment. that because the property is owned in trust, it’s safe from creditors, and at the same time doesn’t form part of your estate, which can be hugely helpful

Register for our free webinar If anything in this article by our CEO has got your interest, please register for our free thirty minute webinar in October.

How to Use a Pension to Buy Commercial Property and Why

13th October 2021 11:00am

Register

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Feature and Insight

By Steve Fox Business Development Manager steve@tpsg.co.uk

Is it like Tough Mudder?

The recent passing of the fourteenth anniversary of my involvement with The Pension Solutions Group (TPSG) Limited has caused me to ruminate on what is now my thirty-fifth year in financial services.

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I can’t remember telling my careers teacher at school that I wanted to administer pensions all my working life so there has obviously been an assorted combination of circumstances that brought me here. Unfortunately, my initial plan to be a journalist for the New Musical Express went awry some time ago.

As well as an obvious passion for my day job (otherwise I wouldn’t still be here), you can often find me on a cross country obstacle racing (OCR) course somewhere in the UK at weekends.

My strong preference is for the small, local, independent, family friendly event where, much like a certain bar in Boston USA, everyone knows your name. Years of racing has led me to these smaller events.

I have a strapline of “kicking and screaming against mediocrity” that I adhere to both on a professional and personal level.

As the saying goes, there are other brands available, but would you really want to opt for them? As soon as I try and describe OCR, pretty much everyone asks, “is it like Tough Mudder?”, because that’s the one everyone has heard of. It is big, loud, brassy and isn’t shy on proclaiming itself as such. Is it fit for purpose? Yes. Is it what it says it is? Yes. Does it treat participants as individuals considering specific requirements and abilities?

No, it is far too big for that. It is no coincidence that it is often referred to as McMudder because it sells cheap and stacks high.

It is essential as TPSG’s Business Development Manager that I have a detailed knowledge of how we do things and what our culture is. Our people, me included, have worked for names that we all know such as Rowanmoor, James Hay, Novia and Royal London - the most important thing that we have learned is how not to do things.

“Treat clients like you want to be treated yourself”, “put yourself in the client’s position”, “treat client investments as if they were your own”.

These are all phrases that are often thrown about by companies operating in the financial services industry. The ability to do these things often sets an entity apart from its peers. It is not rocket science.

Now of course you would expect me to say that TPSG does all those things, but I’m not going to. What I will say is that because the SSAS and unit trust solutions we provide are bespoke, we are never going to be a McMudder. This gives us the opportunity to establish enduring relationships with clients and introducers alike – we still retain some from the first of my fourteen years at TPSG. Those looking for something more honest in the world of pension provision and service, tend to stop looking once we’ve had the opportunity to demonstrate what we can offer.

The prospect of bringing our experience and expertise to bear is one that we relish and embrace.

Yes, the bespoke nature of what we can provide is sometimes complex and intricate, but we like to think we do so in an open, respectful and comprehendible way. Pre-Covid, meetings had to fit in with travel plans, but no more as we are only a Zoom or Teams call away from putting a face to a name. Not quite a shake of a hand before a brew and a biscuit, but hopefully we can get back to that soon.

In those fourteen years, we have accumulated business partners that share our perspective. A wise man doesn’t know all the answers but knows where to find them. So, we have access to industry leading solicitors and accountants that both complement and add to the nature of our product offerings and solutions.

I have a strapline of “kicking and screaming against mediocrity” that I adhere to both on a professional and personal level. This means that given we have learned how not to do things, by definition we must know how to do them.

We always take a step back and ask ourselves what are we trying to accomplish on behalf of our client? For example every property acquisition goes through the same four stages:

In a professional sense, my first love has always been the SSAS, and it is as relevant today as it has always been. I regularly encounter situations where post A-Day, Members may have tried to administer their scheme themselves and got themselves in to difficulties or they’re using a provider offering them sub-standard levels of service and administrative capability.

We are happy to look at any scenario and whilst, if you “compare the market”, you’ll know that we are not the cheapest, we continually strive to offer real value for money coupled with ruthless efficiency. Both are concepts that are unfortunately becoming more and more unfashionable.

Putting people in space is the only thing that is truly rocket science.

Demonstrating integrity whilst treating clients and advisers with understanding, courtesy and respect is a basic responsibility that is often under-estimated by others but never knowingly under-provided by us at TPSG. It really is important for us to be trusted on the important matters.

Does everyone know our name?

No, but they are sure to get peace of mind, a warm greeting and a smile when they do.

are we allowed to buy it? can we afford to buy it? should we buy it? lets buy it.

That said, every transaction does have its own nuances that we and are partners are well versed in dealing with.

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Company News

Introducing our

charity of the year We’re super pleased to announce that we are championing Olive Branch Branch Counselling based in Chippenham, Wiltshire.

This important local organisation offers a professional counselling service that aims to provide clients with a safe, secure and confidential environment in which to address any issues they may have that are causing concerns, with a view to bringing about positive lasting change.

We’ve got lots of exciting plans in the pipeline to support this important organisation over the course of 2021 2022. Stay tuned for more information.

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Mythbusters Busting Industry Myths and service can and can’t dos

Fill in the basic details on the application form about the investment and send it to the pension provider pronto.

Organising investments on behalf of a client using their pension is easy peasy.

oh, pick

They’ll get this off to the investment company and immediately send the funds for investment.

Then it’s a simple case of watching your client’s money grow!

me!

Any questions?

What if the form is missing key information about the investment and a client’s signature?

Well, that’s simple, we’ll get that filled in, signed and sent back over.

It’s important Advisers fully complete forms and give as much information upfront, ensuring everything’s fully signed to avoid lots of back and forth.

What’s more, different investment companies will have their own requirements which can add time to getting things underway before funds can be sent for investment.

Oh no, not you again?

But what if the Investment company then have further questions?

Argh, OK Bright Spark, what is your point here?

Ok Brightspark, I think we all understand. I’m going to skip over this next part about sending any form of ID for anti-money laundering checks.

Hold on a minute!

This is going to be a long day.

THE LOOP | SEPTEMBER 2021

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Company News

Meet our latest recruits

Matthew Britain PSGS Compliance Administrator

Aimee Parsons Accounts Administrator

Elizabeth Johnson TPSG Administration Assistant

Molly Summersgill-Smith Admin Assistant

TPSG and PSG SIPP are always on the hunt for bright sparks to join our growing teams - find out more – email your CV to tracey@tpsg.co.uk

Stephanie-Jane Routledge Administration Assistant