11 million people are at risk of entering ‘pensioner poverty’ when they retire. With the average pension pot standing at £36,800 a person will need to save six and a half times more to reach the £240,000 required to generate the government’s recommended retirement income of £16,200. Help to Save calls for government to make it obligatory for people to save for their retirement by removing the opt-out in the existing auto-enrolment scheme while also increasing individual contributions to pensions as their incomes rise over time.
This report argues that a rigid ringfence around UK banking activities risks creating a swathe of unintended consequences including further closures of high street branches and even the end of ‘free’ banking. However, due to the amount of political capital already expended on legislation, ringfencing legislation is unlikely to be abandoned, so the report sets out a number of recommendations to ensure that UK banks remain competitive and are in a position to be able to lend to businesses and consumers.
Small and medium enterprises (SMEs) are a vital part of the UK’s economy. In March and June 2013 Policy Exchange held two events to discuss access to finance for SMEs. This document summarises the points made at those events. The picture painted was of a complex and mismatched set of needs, incentives, and policies.
Privatising the Banks examines four scenarios for the state to sell off RBS and Lloyds, arguing that the best approach will be a mass share distribution coupled with sales to retail and institutional investors. Under the mass share distribution, applying taxpayers will receive shares worth £1,100-£1,650 on a no upfront cost, no risk basis.
Bank lending to private companies in the UK has fallen in every single year since the financial crisis, dropping a staggering £57 billion since 2008. Capital Requirements: Gold plate or lead weight? says that the primary reason for this lack of credit is due to the financial regulator’s desire to raise the capital requirements of UK banks.
Reform of the Bank of England argues that the Bank of England's focus on monetary policy meant that it was not prepared for the impact of the freezing up of the financial markets and the collapse of some of the UK’s biggest banks. The report argues that without major reform to the Bank, the new financial regulatory regime currently going through Parliament risks being as flawed as its predecessor.
All company directors should be forced to repay bonuses if they underperform. Executive Compensation advocates introducing “clawbacks” to all bonus contracts as the best way to end rewards for failure in the boardroom. Clawback would also be an effective way of ensuring shareholders are able to reduce the outgoing pay of a poor performing director who had decided to resign.
Shareholder votes on executive pay packages should only become binding if a company fails to secure the necessary threshold of votes in two consecutive years. In a response to the BIS consultation on executive compensation, James Barty says the government’s proposals to make shareholder votes on remuneration policy binding is an overreaction.
Sovereign default has become a reality in Greece with profound implications for the rest of the Euro Area and the international financial system. This paper looks at what lessons can be learnt by examining the last major sovereign default in Argentina 2002.
This report makes recommendations for a policy framework that can identify and monitor of early warning indicators that signal increased vulnerability in the financial system, and that can rapidly employ policy tools to address these vulnerabilities.