The RIBA Pension and the 2014 budget

In this year's budget the government unveiled the most radical pension reform for generations. Find out what this means for you and how you can benefit with the RIBA Pension.

Prepare for auto enrolment and more choice

The budget announced an end to the compulsory purchase of annuities on retirement from April 2015 which many may welcome. But what does it mean for those gearing up for auto enrolment?

  • Auto enrolment is still with us and practices need to prepare. All practices that employ staff must set up a qualifying workplace pension scheme that meets government requirements and enrol eligible employees into a default fund
  • But with the budget offering individuals choice as to how they spend their retirement money, the default fund may no longer meet everyone’s needs
  • Architects’ practices should therefore ensure that their chosen auto enrolment compliant pension solution allows their employees to benefit from the flexibility given by the new legislation

The pension 'bombshell' – an end to compulsory annuities

Although it is too early for the effects of the 'bombshell' budget to be fully clear, and no doubt high level proposals will be tweaked during the forthcoming consultation process, it is clear that the government is determined to press ahead with the most radical pension reforms this country has seen for generations.

These proposals, if they go through as intended, will remove the requirement to use 75% of an individual's pension pot to buy an annuity, which gives a guaranteed annual income for life. In practice, this means that:

  • For those early on in their career, the 'sensible' investment choice is unlikely to be changed
  • For those approaching retirement, there will be more choices available and perhaps more reason to consider options other than the default fund investment strategy offered by the pension provider

The RIBA Pension – a fully flexible option

As the RIBA Pension signs up its first practices, the trustees have been actively reviewing the impact of the budget to decide whether there should be any changes to its default ‘Lifestyle’ fund investment strategy.

Meanwhile, for those individuals enrolling into the RIBA Pension who are preparing for their retirement, the RIBA Pension 'Freestyle' option already offers complete investment flexibility with a wide range of pension fund choices. So if you are looking to take full advantage of the proposed budget changes and already know that you want to enjoy your hard earned savings by spending on cars, holidays and houses, you can adjust your investment portfolio accordingly. Others may still prefer the traditional option of buying an annuity, bringing a steady income and peace of mind.

Find out more

The RIBA Pension, delivered through independent trustees Blake Lapthorn, advised by employee benefits consultants Charles Stanley Financial Solutions and pension administration specialists, HS Admin, is available to all employees of architects' practices, whatever the practice size, and to RIBA members who are sole practitioners. For more information contact the RIBA Pension team on or 020 7307 3737.

Posted on Friday 4th July 2014