42 Tuesday December 21 2021 | the times
Business
Plans to increase the state pension age
should be delayed by more than 20
years because of slowing life expect-
ancy, a retirement analyst has claimed.
Men and women may draw on a
pension from the age of 66, but the
government plans to increase this to 67
by 2028 and to 68 by 2039. The rise is
based on estimates about life expect-
ancy and the principle that workers
should spend no more than a third of
their adult life in retirement.
However, new life expectancy data
prepared by the Office for National
Statistics in 2014. These projections
assumed that life expectancies would
continue to improve. On that basis, the
Government Actuary’s Department
calculated that the state pension age
would need to rise to 68 by 2041 to make
sure that most people did not spend
more than a third of their adult lives in
retirement.
Since then the ONS has published
population estimates based on data
collected in 2018 that reveal lower life
expectancies. LCP repeated the gov-
ernment actuary’s calculations to seewhat the new figures implied for the
state pension age. It found that a move
from 67 to 68 would not be needed until
the mid-2060s. The move from 66 to 67
could be put back to 2049-51.
The Department for Work and
Pensions said: “The government is
required by law to regularly review
state pension age and has just
announced the beginning of the second
state pension age review. The review
will consider whether the rules around
state pension age are appropriate,
based on a wide range of evidence,
including latest life expectancy data.”Ali Hussain Chief Money Reporter
Life expectancy figures prompt call to delay increasing state pension age
shows that the move from 66 to 67
should be put back to 2051 and to 68
until the mid-2060s, according to an
analysis by LCP, a leading pensions
consultancy.
The analysis will be welcomed by
about 21 million people born between
1961 and 1984 as they might receive a
state pension at 66 and not 67 or later.
Such a delay would cost the Treasury
about £200 billion, LCP calculates.
The government is required to
review the state pension age every six
years. The first review was published in
2017 and used population estimates6 More than ten million British
employees are disinvesting from
America’s biggest oil and gas
company after their pension fund
sold its shares in ExxonMobil. The
National Employment Savings Trust,
the government-backed default
fund, said that Exxon had failed to
show that it was moving towards
being a low-carbon business. Nest
also has dumped shares in the Hong
Kong-listed Power Assets Marathon
Oil, Imperial Oil and the Korea
Electric Power Corporation.Fewer than 0.01 per cent of bitcoin
investors hold more than a quarter of
the cryptocurrency in circulation,
research suggests.
Investment in the digital currency is
“highly concentrated”, with 10,000 in-
vestors owning approximately five mil-
lion of the 19 million bitcoins in circula-
tion, worth $230 billion, academics
have found. In the United States the top
1 per cent of households hold about a
Tiny bitcoin ‘rich list’ holds huge proportion of cryptocurrency
Callum Jones
US Business Correspondent
third of all wealth, according to the US
Federal Reserve.
Another turbulent year has brought
rallies, which have emboldened bit-
coin’s cheerleaders, and routs, bolster-
ing fears about its volatility. At present
the cryptocurrency’s value has fallen by
roughly a third since surging to a record
high in November. Nevertheless, bit-
coin is up by almost 60 per cent on
where it started 2021.
In a recent paper for the National
Bureau of Economic Research, two
academics highlighted bitcoin’s highlevel of ownership concentration
among its top investors. Regulators
should understand who would be best-
placed to capitalise on moves that
spurred the digital coin’s rise, Igor
Makarov, of the London School of
Economics, and Antoinette Schoar, of
the MIT Sloan School of Management,
concluded.
“Since the inception of bitcoin, there
has been intense interest in the ques-
tion of who are the largest owners, and
how much they actually own,” they
write in Blockchain Analysis of the Bit-coin Market. “There are websites
dedicated to tracking the addresses
with the largest holdings, the so-called
rich list, one of the most well-known
and widely followed lists in the crypto
community.
“From a public policy perspective, it
is important to understand who is posi-
tioned to benefit most from any price
appreciation if regulators allow a
broader adoption of bitcoin. Are these a
select few or the general public?”
Governments are considering how to
respond to cryptocurrencies as theybecome more prevalent. Policymakers
such as Andrew Bailey, governor of the
Bank of England, have warned of the
dangers of investing in such assets.
Central banks such as the Fed and the
Bank are considering whether to
launch their own digital coins. China,
which has done so, has cracked down
on cryptocurrency trading and mining.
Schoar told The Wall Street Journal:
“Despite having been around for 14
years and the hype it has ratcheted up,
it’s still the case that it’s a very concen-
trated ecosystem.”Insolvency faces
new regulator
and crackdown
Louisa Clarence-Smith
Chief Business Correspondent
The insolvency profession will be
governed by an independent regulator
with powers to seek compensation for
victims of malpractice under govern-
ment proposals to be announced today.
Ministers are planning tougher regu-
lation for insolvency firms and practi-
tioners after allegations of misconduct
and conflicts of interest.
There are about 1,600 insolvency
practitioners in Britain who help to
rescue companies from administration.
They can seize assets and remove
directors and are self-regulated at
present by four groups, including the
Institute of Chartered Accountants in
England and Wales and the Insolvency
Practitioners Association.
Today’s government consultation
will propose replacing the membership
bodies with a single independent
regulator that would sit within the
Insolvency Service.
Lord Callanan, the business minister,
said that the proposals would “deliver
greater transparency, accountability
and protection for creditors, investors
and consumers.”
A new mechanism will be introduced
that will allow compensation to be paid
for victims of misconduct or error by an
insolvency practitioner or firm. Under
the present system, membership bodies
can fine insolvency practitioners, but
for a victim to receive compensation
they generally are required to pursue
expensive and risky court proceedings.
This year MPs accused the insol-
vency profession of operating like the
“Wild West” after an inquiry by the all-
parliamentary group on fair business
banking found “startling” evidence
about the behaviour of the profession,
including widespread conflicts of
interest.
Prominent cases included the sale of
Silentnight, a mattress company, to
HIG, a private equity firm. KPMG and
one of its former partners were fined in
August after it was found that hey had
lost objectivity when they assisted HIG
in buying the company without its £100
million pension scheme.
The all-party parliamentary group
found that between 2010 and 2019
nearly 8,000 complaints were made
against insolvency practitioners, but
only five lost their licence. Kevin
Hollinrake, co-chairman of the parlia-
mentary group, said: “Without a robust
regulator and no mechanism for
redress, insolvency practitioners have
effectively been their own judge, jury
and executioner.”
Toby Starr, a partner at Humphries
Kerstetter, a City law firm, said: “This is
a very encouraging update from gov-
ernment.”
Ministers face opposition from the
insolvency profession. Duncan Wig-
getts, of the ICAEW, said: “The biggest
problem with the current framework is
not the identity of the enforcing body
but the regulatory framework itself,
which is focused on the regulation of
individual insolvency practitioners and
so prevents complaints — and substan-
tial penalties in cases of misconduct —
to be brought against firms. In our view,
the creation of a single regulator is both
unnecessary and potentially damaging
to the UK’s insolvency and restructur-
ing profession.’’
Colin Haig, president of R3, the
insolvency and restructuring trade
association, said that the government
would need to set out in detail “how it
would ensure the genuine independ-
ence” of the proposed single regulator.M
anufacturers
have reported
strong growth
in output in the
last quarter of the year,
but their stocks have
dropped to record lows
for a second consecutive
month (Arthi
Nachiappan writes).
Output rose at its
fastest rate since July,
with increases in 15 of 17
subsectors, according toa survey of 258
manufacturing
companies by the CBI,
the leading business
lobby group. The biggest
increases in the three
months to December
came from the
production of food, drink,
tobacco, motor vehicles
and transport equipment.
However, inventories
deteriorated in December
to -24 per cent from -16
the month before. The
difficulties are set to
continue as companies
expect acute price
pressures to continue for
the next three months.
Anna Leach, deputy
chief economist at theCBI, said that businesses
had increased output to
meet demand. “UK
manufacturing demand
remains strong,” she said.
“However, behind the
scenes, firms are battling
pressures on a number of
fronts. Stock adequacy of
finished goods worsened
to an all-time low for the
second month in a row,
and continued
expectations for sharp
price growth are a
further challenge.”
Companies would
benefit from the shift in
government policy from
isolation to regular
testing to control the
spread of the OmicronCovid variant because it
allowed businesses to
continue to operate,
Leach said.
Business confidence
remained strong despite
Omicron, according to a
barometer published by
Lloyds Bank. Confidence
in the construction sector
recovered from a low of
28 per cent in November
to 39 per cent in the two
weeks to December 10.
Overall business
confidence was
unchanged at 40 per cent.Factories
warn of
low stocks
Carmakers such as Aston
Martin Lagonda helped the
manufacturing sector to
report improved output