Barclays Bank Pensions 14 March at 10:50AM in Savings & investments 5 replies 235 views

ReleaseMagic

The Guardian reports that Barclays is taking a pension contributions holiday in 2023, because its liabilities have fallen, due to inflation going over 10% while the increases on its pensions are being limited to 5% even though they have discretion to pay more. Most of the former staff earned under £25,000 working as cashiers, call centre operators, cleaners, clerks and operations staff with modest pensions of up to £15,000. The extra cost of full indexation would be less than £80m while the bank is reported to be paying £1.2 billion in bonuses to Investment Bankers. Sad state of affairs - they learned nothing from the Financial Crisis on ethics, fairness or morality. I've closed my Barclaycard account in protest. One customer won't make them change their ways, but tens of thousands might....  theguardian.com/business/2023/mar/13/barclays-could-save-200m-by-pausing-payments-to-staff-pension-scheme

artyboy

Capped indexation is common across virtually all DB pensions, outside of the public sector. So whilst closing your barclaycard account might give you a warm feeling of solidarity with the downtrodden workers, I'd be interested to learn what alternative you choose that is more ethical in your view...?

xylophone

The article is here

https://www.theguardian.com/business/2023/mar/13/barclays-could-save-200m-by-pausing-payments-to-staff-pension-scheme#:~:text=The document said the trustees,met out of the UKRF.”

Capped indexation is common 

 The complaint is less against the capped indexation than the non-application of the discretionary power at a time of high inflation?

penners324

The pension scheme has a £2 billion surplus no need for employer contributions at present.

OP just ranting 

wmb194

I'll certainly be keeping my Barclays accounts and Barclaycard. At the moment I particularly like its 5% Rainy Day Saver savings account.

ReleaseMagic

dunstonh said:

The Guardian reports that Barclays is taking a pension contributions holiday in 2023, because its liabilities have fallen, due to inflation going over 10% while the increases on its pensions are being limited to 5% even though they have discretion to pay more

Obviously, this only applies to their old DB scheme.  It does not apply to their DC scheme or any of their retail pensions.

Not so. The UK Retirement Fund is run as one fund with DB and DC sections. The courts ruled that Barclays could cross-subsidise within it, so the DB surplus can be used to fund the DC scheme, and enables a contributions holiday, but it can't work in reverse.

Also, the reason is going to be mostly due to gilt yields.   The artificially high valuations for liabilities have significantly reduced and are now back closer to historic norms.

 Most of the former staff earned under £25,000 working as cashiers, call centre operators, cleaners, clerks and operations staff with modest pensions of up to £15,000. 

Which has absolutely nothing to do with it.

Yes it does, because people on low incomes have less ability to withstand the shocks of inflation. They are the ones faced with having to use Foodbanks, whereas the Investment Banker might not be able to afford to build their Kensington basement pool this year. 

 The extra cost of full indexation would be less than £80m while the bank is reported to be paying £1.2 billion in bonuses to Investment Bankers.

How much money does a call centre operator or cleaner make for the bank compared to an investment banker?

Without their lower paid colleagues, Investment bankers cannot carry out their work. In terms of value to society, many people would place retail bank staff in a higher position than an investment banker. Life is not just about profits but as a Financial Adviser, I can understand that your values will differ.

. Sad state of affairs - they learned nothing from the Financial Crisis on ethics, fairness or morality. 

Doesn't sound like you have either.

An old adage - If you have nothing positive to contribute, it's better to say nothing, otherwise you undermine your integrity.

. I've closed my Barclaycard account in protest. One customer won't make them change their ways, but tens of thousands might....  theguardian.com/business/2023/mar/13/barclays-could-save-200m-by-pausing-payments-to-staff-pension-scheme

Your choice but taking action over something you don't understand is rather daft.

I understand it very well. I have an income beyond the dreams of most people, but I still want those on the lowest incomes treated fairly. Indexing pensions is the least our exceptionally profitable banks can do.