Rudy Khaitan on chancellor Hunt’s efforts for UK pensioners

In the aftermath of chancellor Jeremy Hunt’s autumn statement, the UK’s pension sector is experiencing a transformative period. Major insurers, Legal & General and Rothesay, have sealed deals totalling £8.8 billion to assume company pension liabilities.  

This marks the largest deal in the UK to date, bolstering the pensions sector amid the challenges posed by volatile markets. Legal & General’s £4.8 billion full buy-in for the Boots pension scheme and Rothesay’s £4 billion buy-in with a Co-operative group pension scheme section reflect a growing trend of pension scheme trustees transferring liabilities to insurers. 

However, concerns about insurers’ exposure to reinsurers have surfaced. Rudy Khaitan, managing partner of Senior Capital, a leading later-life lending specialist, emphasised the need for a strategic shift. Khaitan suggests embracing fixed-income allocations, particularly through residential mortgage-backed securities (RMBS) and the pooling of contribution schemes. 

Khaitan also noted the remarkable growth of the UK equity release market. The market has doubled in the last five years due to inflationary pressures and rising interest rates. He proposes that RMBS, in times of economic uncertainty, can provide steady cash flow for pension funds. 

Addressing the historical underperformance of Britain’s pension sector, Khaitan highlights the potential for these strategies to reduce losses and enhance returns. According to Moneyfacts, the UK’s pension funds have an average annual return of 9.5% as of 2021, notably lower than Canada’s 20.4% and Australia’s 22.3%. Khaitan emphasised the significance of chancellor Hunt’s plan to consolidate workplace pension schemes and allocate up to £75 billion for high-growth investments, foreseeing improved returns for pensioners. 

In Rudy Khaitan’s own words, “Chancellor Jeremy Hunt’s plan to consolidate workplace pension schemes… represents a strategic effort to stimulate the UK economy and generate better returns for pensioners.”

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Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.