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2023-01-31-accounts

ANNUAL REPORT & FINANCIAL STATEMENTS

1 February 2022 – 31 January 2023

Registered Company Number: 4145584. Charity Number: 1087856 (England & Wales)

Contents
Page
About the Pensions Policy Institute
1
Annual Report by PPI Director
2
Annual Report by PPI Chair of Trustees
2
Annual Report by the Board of Trustees
Objectives and Activities
Our Pillars
5
Our Aims
5
Our Core Activities
6
The Power of the PPI’s Models
6
Strategic Relationships
7
Achievements and Performance
8
Research Sponsors
9
2022 Impact Case Studies
The DC Future Book in association with Columbia Threadneedle Investments
12
The Underpensioned sponsored by Now:Pensions
12
The UK Pensions Framework in association with Aviva
13
Retirement Living Standards – PPI Analysis sponsored by PLSA
16
Plans for Future Periods
2023 Research Plans
17
The Pensions Data Project
18
Structure Governance Management & Risk
Constitution and Objects
20
Members’ (Governors) Liability
20
The Board of Trustees
20
Trustee Responsibilities
22
Contents
Page
Trustee Elections
22
Management and Staff
22
ED&I Statement
22
Remuneration Policy
22
Gender Pay Gap
23
Risk Management
23
Public Benefit
23
Pensions Policy Institute 2022 Financial Report
Our Funding Model
25
Review of Financial Position
Results for the year
26
Reserves
26
Investment Policy
26
Appointment of Auditors
26
Approval
26
Independent Auditor’s Report
27
Statement of Financial Activities for the year ending 31 January 2023
29
Balance Sheet as at 31 January 2023
29
Statement of Cashflow
30
Notes to the Financial Statement for the year ending 31 January 2023
30
Administration Details
Our Supporters
35
Administration Details
36
Institute Contacts
36

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2 PPI – UK Pensions Framework
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About the Pensions Policy Institute

The Pensions Policy Institute (PPI)

Why is the PPI needed?

is an INDEPENDENT , not-for-profit, research Institute. Since 2001 we have been at the forefront of informing policy making around pensions and later life savings. Robust, independent analysis has never been more important to shape future policy decisions, and our work facilitates informed decision making, showing the likely outcomes of current policy and illuminating trade-offs implicit in any new policy initiative. We do not lobby for any particular cause, and we are not a think-tank, taking politically influenced views.

The PPI is required primarily because too few people understand what is needed for the provision of an adequate income in later life. There are also complex intergenerational issues and a mix of State and private provision that seek to provide for individuals in later life. The PPI brings these elements together and presents the trade-offs for any policies that seek to address them.

We acknowledge that our research is most relevant at the policy-making level, through the part we play, with others, in raising the wider understanding of pensions and retirement income provision.

Since our Launch in 2001 we have...

launched over launched over Responded to over 150 research 134 Briefing 70 Consultations reports Notes

We have a clear vision, supported by our mission, which underpins all activities undertaken by the Institute.

Our Vision

Our Mission

Better informed policies and decisions that improve later life outcomes

To promote, evidence-based policies and decisions for financial provision in later life through INDEPENDENT research and analysis.

We believe that better information and understanding will lead to better policy framework and better provision of retirement for all

We aim to be the authoritative voice on policy on pensions and the financial and economic provision in later life.

To find out more about how we have been shaping the policy debate for over 20 years please click here.

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PPI: Annual Report & Financial Statements

Report by PPI Director

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Chris Curry
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PPI with such affection and fondness. Sally’s passion for equality in later life was evident right up until the time of her passing, and she leaves a legacy that all of us fortunate to work so closely with her, will strive to continue. She will be greatly missed by us and so many others.

Reflecting on the past twelve months, as I do each year for the Annual Report, we have all had yet another challenging year. The ongoing uncertainty created by the continuing impact of Covid and the political and economic landscape made 2022/23 financially challenging for the PPI which saw a small financial loss in 2022/23. We saw some internal changes with two staff members moving on to great things, the introduction of new staff members to the team and welcomed disruption due to maternity and extended paternity leave. This report demonstrates very clearly that despite all these obstacles externally and internally, the PPI team has again been very accomplished in maintaining the quality of PPI research and in ensuring that they reach the right audiences. In this respect, it has been another very successful year and I am exceptionally proud of the work produced, and the contribution that the PPI has made to the shaping of later life policy.

As well as reflecting on the past year, we are also very much looking ahead to 2023 (and beyond!). We have new research scheduled to be launched, and are revisiting some areas, covered previously, to update the research into these specific topic areas. When revisiting past research, I am always encouraged by progressions which have been made, and whilst there is never a single direct link between any one research institute and policy changes made by government, the PPI has been influential in policy developments over the years. We remain, focussed committed to and passionate about our vision, of better-informed policies and decisions that improve later life outcomes. The evidenced-based, and independent, research carried out by the PPI remains as vital and relevant now, in the evolving policy world, as it ever has, and we are proud to support policymakers by providing robust and rigorous research to inform the debate and shape thinking.

In 2022, we welcomed our new Chair of Trustees, Maddi Forrester, and several new Board Members. This refreshed Board of Trustees are leading our strategic discussions, which are developing all the time. Our Supporter network continues to grow, allowing us to carry out our core work. As always, but especially in these turbulent times, we are grateful for your ongoing support. None of the activities we undertake at the PPI would be possible without the ongoing support of our Supporters and Research Sponsors.

My sincere thanks to my Team at the PPI but also our wider network including our Trustees and Governors, who provide their time to us on a voluntary basis, Supporters of the PPI and our Research Sponsors

2022 also brought the very sad news of the passing of our President, Baroness Sally Greengross, OBE. Sally had been the PPI’s President since 2004, and always supported the vision and the mission of the

Report by PPI Chair of Trustees

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Madeline Forrester
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New beginnings - We have made minor amendments to the terminology we use for our committees, and to those that serve upon them, which you will see reflected throughout this report. For ease I have summarised these here:

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Current language New language
Council Board
Council Member Trustee
Governance and
Governance Committee
Nominations Committee
Finance, Audit and Risk
Finance Committee
Committee
Funding and External
Funding Committee
Relations Committee
Charity Institute
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It gives me great pleasure to introduce my first annual report and the PPI’s twenty-second.

2022 has been an exciting year for me, becoming the PPI’s Chair of Trustees, and I have enjoyed working with the Trustee Board, committees, and the PPI Team. My passion for the PPI’s Mission and Vision is genuine, and something that has grown stronger in my first year as Chair. It is also invigorating to see this passion reflected back to me, on many occasions, through the interactions I have had.

The PPI operates in a unique space in the pensions ecosystem, with a prime purpose to inform the policy debate by producing evidence-based research. Our work facilitates informed decision making through showing the likely outcomes of current policy and illuminating the trade-offs implicit in any new policy initiative. We are a trusted source of INDEPENDENT information and research. But, as always, we are determined to do more, and I am excited to be involved in early discussions for future projects launching soon.

During my inaugural speech, at the 2022 AGM, I specified one of my priorities for my tenure as Chair was to increase the diversity of the Trustees. Boards which are cognitively diverse generally make for better discussions. This, in part, has led to us looking at the committees we have, and their Terms of Reference, to ensure that diversity feeds in to not only the people on the committees, but the work they look to undertake. This journey has been supplemented by The Board of Trustees, and the PPI Team, undertaking a “Courageous Development” programme with Evosis. The PPI always have, and always will be, committed to diversity and inclusivity in the workplace. This course challenged our thinking and opened our minds further, providing us with the tools to continue to build, challenge and develop our Equity, Diversity and Inclusion (ED&I) strategy. We continue to nurture the talent of each individual to create a successful organisation. In addition, for us, it is important that we represent the pensioners and future pensioners who are impacted by the public policy we seek to inform.

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Chair of Trustees’ Report - continued

As I enter my second year of my term as Chair, ED&I still remains a priority for me, to build upon the success we have had starting our journey. During the coming twelve months we will be working to embed our ED&I strategy.

One area which I am pleased to see continues to grow is the PPI’s Strategic Relationships. This year we signed a Memorandum of Understanding with Age UK. We now have three active Strategic Relationships, each with a specific remit and objective, but all with one commonality “to work together to share complimentary knowledge, skills, expertise and networks to achieve the vision that better information and understanding combined with decision makers that represent savers more fairly will help lead to a better policy framework and a better provision of retirement income for all.” .

We live in challenging times, and we appreciate that this can make it more challenging for you, the Supporters of our worth. However, in times like these, where the public purse is stretched, our work is even more important, and we could not do what we do without you.

Our Supporters, Research Sponsors and Individual Donors allow us to continue with the vital core work the Institute undertakes. We are grateful for all donations received and as a charity, without these donations, we would cease to exist. Whilst the majority of our funds come from our Supporters and Research Sponsors, in recent years we have had donations from Individual Donors. If you would be interested in supporting the Institute by making an individual donation, we would be very grateful, please contact danielle@pensionspolicyinstitute.org.uk for further information and also to register for Gift Aid.

Thank You!

On behalf of the Board of Trustees and the PPI Team, we would like to extend our sincere thanks to the many people who have supported and worked alongside us this year.

Our Supporters, Research Sponsors, Strategic Relationships, Governors, Trustees, Model Review Board and Individual Donors, all make it possible for the PPI to continue to be at the forefront of informing the policy debate.

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PPI: Annual Report & Financial Statements

ANNUAL REPORT

The Trustees are pleased to present the Annual Report and Financial Statements of the Pensions Policy Institute (the ‘PPI’ ‘Institute’) for the year ending 31 January 2023.

The Trustees confirms that the Annual Report and Financial Statements of the Institute comply with current statutory requirements, the requirements of the Institute’s governing documents and the provisions of the Statement of Recommended Practice (SORP) ‘Accounting and Reporting by Charities’ Second Edition.

Charities with income below £1 million and assets below £3.26 million are not required to undertake a full audit. Trustees are aware that the Institute’s gross income and assets are below this audit threshold. However, have agreed that it is important to be transparent and have decided to have an external audit of the Institute’s finances and financial procedures carried out each year.

Objectives and Activities

Our Pillars

The research looks at the economic and social effects of existing policies and assesses the impact of potential changes. The aim of the research is to help all those interested to achieve a better, wider understanding of retirement provision issues and for policy decisions to be based on fact-based analysis.

The Institute is an educational research charity established in 2001 to undertake rigorous research on pensions and retirement income from an independent and long-term perspective.

Five pillars have been established that form the foundation of the Institute’s activities

Relevant and accessible information on the extent and nature of financial provision in later life, and any associated implications.

1

Lead the debate and contribute fact-based analysis and commentary to the policymaking process. Encourage research on later life provision (at the PPI and with others) that informs policy 3 and decision-making.

2

A trusted source of information and analysis and impartial feedback to those with an interest in later life issues. 5 Model the impact of policy changes on financial

4

Model the impact of policy changes on financial provision in later life.

Our Aims

The Institute aims to be “the authoritative voice on policy on pensions and the financial and economic provision in later life.” We believe that better information and understanding will help lead to a better policy framework and better provision of retirement income for all. The Institute is unique in the study of UK pensions and retirement income as it is:

INDEPENDENT With no political bias or vested interest.

The Institute provides factual, evidence-based research outlining potential outcomes for individuals and for Government spending on particular policy directions and analysis of trends within the pensions’ landscape.

Led by experts Considers the Pursues both Encourages focused on pensions whole pensions and academically rigorous dialogue and debate and retirement income retirement income analysis and practical with multiple provisions framework; assets policy commentary constituencies. derived from the state provision, private pension and the interaction between them.

However, it is also important that all of our publications are accessible to everybody and, therefore, all research is published on the website and links made available on various social media platforms for free downloading.

Our research will have most immediate relevance for Government policy-makers and their advisers, pension and savings providers, pension scheme trustees, employers, trade unions, charities, trade bodies, academics, and commentators. The Institute’s work will also contribute to raising the wider public’s understanding of pensions.

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Our Core Activities

Each year the Institute carries out a number of core activities which are funded by financial donations received from our Supporters and Individual Donors, these include:

The Pensions Primer: a guide to the UK pensions system which provides a comprehensive overview of the UK pensions system and is intended for people wanting to learn about the UK pensions policy framework. The document is updated annually with new policy changes, developments and economic assumptions. Last year the Pensions Primer was downloaded just under 700 times

Pension Facts is a compendium of key facts and statistics on pensions and retirement provision in the UK. The aim is to collate this into a single place with a range of different statistics on demographic change, key State Pension and private pension indicators. The Pension Facts key tables are updated as new data becomes available. Last year Pension Facts was downloaded just under 200 times.

Consultation Responses We regularly respond (both in writing and orally) to consultations and calls for evidence relevant to pensions and retirement policy.

This year we also introduced a Pensions Glossary , which in part supports the terminology most used as part of our successful Knowledge Sharing Seminars: an introduction to the UK pensions system but also covers the common abbreviations and terminology which are frequently used within the sector.

Parliamentary Engagement: Our research is used as evidence presented to the Work and Pensions Select Committee and Bill Committees, briefings with Ministers and opposition shadows, senior civil servants and cited in Parliamentary debates, Government consultations and papers. Additionally, we have close working links with Government Departments.

External Engagement: Regular meetings take place with individuals, government, academics and organisations from within the pensions and financial services industry and other areas around later life issues. The PPI Team also undertake various external speaking engagements at industry events.

The Power of the PPI’s Models

The Institute maintains a suite of micro-simulation models, capable of analysing long-term outcomes from the current UK pensions system and the impacts of possible reforms. These represent the current pensions system and economic forecasts, including uncertainties, and allow for particular scenarios to be modelled. The models can also illustrate projections of the impact on both an individual’s post retirement income and on future pensions systems revenue and expenditure cashflows to the Exchequer.

Further information on the PPI’s suite of models can be found here.

Risk Management of the PPI Models

The Institute has a dedicated Model Review Board (MRB), consisting of a group of independent industry experts in modelling. Each member contributes in a personal capacity, and results and analysis are the responsibility of staff, and not members of the MRB, who provide guidance regarding the modelling capability and assumptions used. This validates the assumptions and the Institute’s approach, and ensures there is oversight of the models.

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Strategic Relationships

During the last twelve months the PPI signed a new Memorandum of Understanding with Age UK. We now have three active Strategic Relationships.

Age UK: agreeing to work together, with a shared focus upon later life, and develop a deeper two-way relationship which strengthens foundations to achieve better informed policies and decisions that improve later life outcomes.

The purpose of these strategic relationships is:

“To work together to share complementary knowledge, skills, expertise and networks to achieve the vision that better information and understanding combined with decisionmakers that represent savers more fairly will help lead to a better policy framework and a better provision of retirement income for all”

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PPI: Annual Report & Financial Statements

2022/23 Summary – Performance and Impact

Achievements and Performance

Just under 5000 downloads for Reports and Briefing Notes

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RESEARCH SPONSORS

During 2022 the PPI launched nine Reports and four sponsored Briefing Notes, covering a wide range of topics. These Reports and Briefing Notes were sponsored by a variety of organisations. Our thanks are extended to all of our Research Sponsors:

To view the reports launched during this financial period please click here to visit the PPI’s website.

Association of British Insurers

Aviva

Columbia Threadneedle Investments Hymans Robertson Insight Investment Kings’ College London NOW: Pensions People’s Partnership Pensions and Lifetime Savings Association (PLSA) Punter Southall (PS Aspire) Retirement Line Standard Life, Part of Phoenix Group State Street Global Advisors

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Research Reports launched in 2022 Briefing Notes launched in 2022 Projection of future pensioner household income, analysis based upon the Wealth and Assets Survey dataset How will future pensioners use guaranteed income products? Briefing Note Number 129 How do cost-of-living increases affect pensioners? Briefing Note Number 130 Set for lrfe? Guaranteed incomes in retirement Eighth Edition The DC Future Book: in association with Columbia Threadneedle Investments Modellin an of pension policy options, analysis based upon the Wealth Assets Survey dataset and PPI individual modelling Briefing Note Number 131 CDC: International Insights The UK Pensions Framework: in association with Aviva Trends, Transitions and Trade-offs in the UK Pension System Briefing Note Number 132 The pensions policy impact of poor personal finance data on people from ethnic minority groups The UK Pensions Framework: in association with Aviva Indicator Appendix The Underpensioned Index 2022 Edition Briefing Note Number 133 How does high infiation impact pension schemes and their members, and how might inflation change in the future? The way forward for university pensions Contributions into the State Pension system versus receipt5 for people of drfferent income and employment profiles Briefing Note 134 Lost Pensions 2022: What's the scale and impact? + Prev Next • PPI: Annual Report & Financial St(ytements io

2022 IMPACT CASE STUDIES + Prev Next •

these trends’ future trajectory. For example, last year’s edition projects that by 2042 there could be as many as 10.6 million active members in master trusts, compared to 8.9 million in 2022, while aggregate assets in DC schemes could grow from £545 billion to £1.03 trillion over the same period.

The DC Future Book

The DC Future Book in association with Columbia Threadneedle Investments is

an annual compendium that sets out available data, annual and longitudinal analysis and projections of future trends. Demographic and policy changes have increased the risks borne by DC pension savers and the complexity of decisions that they must make at and during retirement. This analysis supports the PPI’s key objective to provide relevant and accessible information in order to ensure that pensions policy is informed, and evidence based. Since its inaugural publication in 2015, the DC Future Book has become an established and vital source of data on the DC landscape for stakeholders across government and industry.

The 2022 edition of the Future Book spotlighted the current environment of high inflation, the challenges it poses for DC schemes and the options available to them for mitigating the risk to member outcomes. With inflation reaching its highest level in 40 years and expected to rise further still, there are likely be many impacts across the DC landscape. High levels of inflation, especially over prolonged periods, have the potential to worsen retirement outcomes. In order to support positive retirement outcomes, DC investment decision makers may need to re-evaluate their investment strategy. However, it is important that they consider the long-term impact before making substantial changes to investment strategy. As in any economic climate, there are trade-offs associated with each asset class during times of high inflation, especially when coupled with uncertainty about future levels of growth.

The DC Future Book tracks trends across the whole DC landscape, including the growth of automatic enrolment (with 10.7 million automatically enrolled by June 2022 and a further 974,000 automatically reenrolled) and increases in average pot sizes (£11,800 according to 2021 data in the latest edition).

The longitudinal nature of the Future Book in tracking trends in the DC landscape is particularly valuable during times of uncertainty and volatility. The 2022 edition showcased the role the DC Future Book plays in providing analysis and discourse in response to current changes in the DC landscape in order to stimulate more effective approaches to present challenges.

The report also includes detailed analysis of DC asset allocation, gathered through the annual PPI DC Asset Allocation Survey, and trends in access to DC savings. In addition to tracking current trends, the DC Future Book uses PPI modelling to project forward

The Underpensioned Index

The PPI’s Underpensioned research began twenty years ago with a report launched in November 2003. Since this time the PPI have continued to build upon the influential work in this important area.

In 2022, the PPI launched the first full update of its Underpensioned Index. Private pension incomes of underpensioned groups remain below three-quarters of average population private pension incomes, with some groups experiencing significant declines compared to the 2020 Index. Private pension incomes of some underpensioned groups have remained relatively stable, including single mothers, carers and divorced women (although single-mothers experienced a small decline of 3%). Other groups have, however, experienced significant declines. Private pension incomes of people from ethnic minority backgrounds decreased by almost 10% compared to the population average, while incomes of people with disabilities declined by almost 8%. The current economic climate could exacerbate the underpensioned gap, making it more challenging to implement further policies to narrow the gap in the short term, at a time when individuals, employers and Government are facing significant financial difficulty. However, the underpensioned challenge is long term in nature. While some of the potential policy levers discussed in relation to underpensioned groups may not be appropriate to be actioned during the current crisis, inequalities may increase during this period. It is, therefore, more important than ever that plans are

made for improving inequalities over the long term, even if they may not be actioned until the economy has stabilised. Slow progress on narrowing gaps in retirement wealth and income, despite the success of automatic enrolment, emphasises the importance of taking a long-term perspective on the underpensioned challenge and continuing to monitor the gap through this longitudinal analysis. The longitudinal nature of the underpensioned series means that it can identify both immediate and longer-term impacts of changes affecting underpensioned groups, thus helping to support more informed policymaking.

The award winning Underpensioned series has received extensive press coverage across a range of publications:

As well as the annual publication of PPI’s Underpensioned report, work in 2022 included regular and ad hoc data analysis produced in order to provide policy evidence for sponsors of the Underpensioned series, NOW: Pensions, use in media campaigns and lobbying activities. This is an important part of the PPI’s aims to ensure that policy proposals are based on a solid base of evidence.

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THE UK PENSIONS FRAMEWORK

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constructing a clear, evidence-
based picture of how strengths
and vulnerabilities in the system
relate to each other, and how
they are evolving over time. The
Framework also supports one of
the Institute’s strategic objectives
to ‘encourage the right framework
for long-term pension planning’
and, along with its Pensions Policy
Wheel visualisation tool, is fast gaining
recognition across the pensions world.
The 2022 report describes trends in
retirement saving and outcomes, the impact
of policy trade-offs on people and processes,
and the extent to which findings reflect
structural changes and transitions taking
place across the wider pension system.
PPI: Annual Report & Financial Statements 13
Housing Costs
in Retirement
Retirement
Living
Costs
A
Cost of Living
N
Engagement
Household Debt
Process
Fairness
Choice & Defaults
I B
Intergenerational
Transfers
Health & Social Care
Costs (Individual)
A I
Home Ownership
Retirement Income
T L
Non-
Pension
Wealth
I
Inclusion Poverty
Non-Pensions Savings
S
Retirement
Outcomes
T
Living Standards
Tax Relief
U Y
Assets & Investments
Outcome
Fairness
Between GroupsDifferences
Data & Metrics Pensions Access
DC Contributions
S
DB Accruals
S A
Private
Pension
Saving
DC Coverage
Longevity &
Innovation & Reform Population Ageing
DB Coverage
S D
All Private Pensions
SP Income Levels
E E
Family
Arrangements
System
Complexity
N
Means Tested Benefits
Q
State
Support
Value for Money SP Income - Coverage
(nSP)
R
SystemStability
U
SP Income - Coverage
(BSP)
I
Health & Social
Care Costs (State)
Protecting
Savers
A
ESG
A
Earnings
F C
& Safety NetsSystem Security
SustainabilityFiscal
LabourMarkets
EmployerSustainability
Y
EmploymentRates
Sustainability Scheme
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in association with
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2022 Edition: Trends, Trade-Offs and Transitions in the UK Pension System

The PPI published its inaugural UK Pensions Framework report in 2022, a ground-breaking study of how the UK pension system is supporting retirement outcomes among pensioners of today, and the implications of saving behaviours for pensioners of tomorrow. This report followed on from the successful launch of the UK Pensions Framework Design Series, in 2021, which described how and why the Framework was being developed.

constructing a clear, evidencebased picture of how strengths and vulnerabilities in the system relate to each other, and how they are evolving over time. The Framework also supports one of the Institute’s strategic objectives to ‘encourage the right framework for long-term pension planning’ and, along with its Pensions Policy Wheel visualisation tool, is fast gaining recognition across the pensions world.

The UK Pensions Framework is a new analytical instrument that provides over forty comprehensive, purpose-built indicators relating to measures of adequacy , sustainability and fairness in the UK pension system. Its aim is to become established as an essential practical tool for assessing and improving the UK pensions landscape, by

The 2022 report describes trends in retirement saving and outcomes, the impact of policy trade-offs on people and processes, and the extent to which findings reflect structural changes and transitions taking place across the wider pension system.

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Key findings concluded

Changes designed to offset the impact of population ageing are helping to improve affordability for the State and employers in the UK pension system, but they come at a cost to individuals.

Among individuals, retirement income inequality remains high, and although more people are saving, they are not necessarily saving enough for retirement. There is a growing need for policy reforms to tackle pension adequacy without compromising affordability and participation.

System design has an increasingly important role to play in mitigating against the erosion of savings, and the risk of poverty. However, inconsistencies are producing tensions between the need for engagement, and the need for defaults that can protect people from risks that might arise from low engagement.

Changes have created a more straightforward State Pension system, but a more complex private pension system, where individuals bear greater responsibility for retirement outcomes than ever before, but the State, State Pension, and other institutions still have a critical role to play.

The research launch was well-attended and received extensive press coverage across a range of industry publications including Pensions Expert, The Actuarial Post, The IFA Magazine, Professional Pensions, and Pensions Age. The research was also mentioned in the House of Commons Committee Special Report on Protecting Savers – five years on from the pension freedoms.

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The future of the Framework:
In 2023, the Institute will use the UK Pensions
Framework to carry out policy simulations that can
support its research by helping to project the potential
impact of policy options on the ability of the UK
pension system to meet its intended goals. Through
modelling selected data from the 2022 baseline
analysis against different scenarios, the research
also aims to demonstrate how the Framework can be
used as an evaluation tool for both past and future
retirement outcomes, and to highlight where results
may be the product of trade-offs within the system.
As policy simulations are underway, the Institute will
maintain the extensive programme of engagement
that has underpinned the widespread input and
support that the Framework received to date.
This support emphasises the importance of the
Framework, not just as a research instrument, but
as a catalyst that can bring people together to look
holistically about how to improve retirement outcomes
in the UK.
L6 Strong support for system objective
L5 Good support for system objective
L4 Some support for system objective
L3 Somewhat fails to support system objective
L2 Poor support for system objective
L1 Fails to support system objective
Unrated in 2022 Edition due to quality of data
Housing Costs
in Retirement
ci
N
n
bi
Retirement
Living
Costs
nabi
na
Cost of Living
aall
A
lit
Engagement
ai li
I
ai
n a
Household Debt
n
Process
Fairness
Choice & Defaults
st tyy
st
Intergenerational
Transfers
A
Fi
B
CostsHealth & Social Care
Fi
SSuu
T I
Home Ownership
Income
Change in Retirement
Non-
Pension
Wealth
S L
Inclusion Poverty
I
Non-Pensions Savings
Retirement
Outcomes
U T
P
Living Standards
Tax Relief
P
&
oo p
&
Between GroupsDifferences Assets & Investments
Outcome
Fairness
Data & Metrics
Y
Pensions Access
S
Ag
DC Contibutions
Ag
l
u
DB Accruals
m
i
e
S
i
e
t
a
A
gn
Private
Pension
Saving
DC Coverage
e
Longevity &
Population Ageing
Innovation & Reform
g
n
g
n
DB Coverage
io
si
S
s
t
D
All Private Pensions
n
D
e
n
S
y
SP Income Levels
S
E E
Family
Arrangements
System
Complexity
N
Means Tested Benefits
Q
State
Support
Value for Money SP Income - Coverage
(nSP)
R
System
Stability
U
SP Income - Coverage
(BSP)
I
Care Costs
Health & Social
Protecting
Savers
A
ESG
A
Earnigs
F C
& Safety NetsSystem Security
SustainabilityFiscal
LabourMarkets
EmployerSustainability
Y
EmployementRates
Sustainability Scheme
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Retirement Living Standards – PPI Analysis

The analysis provides quantitative evidence of the interaction of Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards with the projected retirement income levels of the population approaching retirement. As the Retirement Living Standards are updated, to reflect changes in living costs and the aspirations of retirees, the analysis is updated. This is to reflect how parts of the population may be able to attain these living standards, and to assess the part that policy proposals may bring different populations closer to these goals.

For further details on any of these case studies please visit the PPI Website:

1. The DC Future Book

2. The Underpensioned Index

3. The UK Pensions Framework

– 4. Retirement Living Standards PPI Analysis

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Research Plans for 2023

Our confirmed 2023 research programme already covers topics including:

The ninth year of The DC Future Book in association with Columbia Threadneedle Investment

The Pension Data Project; conducting the first extraction of data and analysis

Repeat of the projection of retirement income levels from Wealth and Assets Survey microdata (PLSA)

What role could alternative assets play in pension investment strategies in the future? (World Gold Council)

As well as

Who are low-earners and how do they interact with the pensions world? (PLSA)

What is member engagement?

How have other countries dealt with decumulation, and what can the UK learn?

How could a CDC style solution work, what would be the pros and cons and what would be the likely member outcome?

Collective defined contribution (CDC) pensions with investment choice: making CDC work

How can the UK prepare for the effect of climate change on retirement? How can barriers to LGPS pooling be overcome?

Sponsoring PPI Research

The PPI gives you the power to shape the cutting-edge of policy making.

Each research report combines experience with independence to deliver a robust and informative output, ultimately improving the retirement outcome for millions of savers.

If you would be interested in discussing sponsoring future reports, please contact Sarah Luheshi, Deputy Director – sarah@pensionspolicyinstitute.org.uk

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The Pensions Data Project

An exciting new pensions research initiative, managed independently on behalf of the entire UK pensions industry by a small group of master trusts and the Pensions Policy Institute (PPI).

They share a common goal of wanting to contribute to a wider societal benefit where everyone has a better provision and can achieve a positive outcome in retirement.

Visit Website

This crucial new facet, which does not currently exist anywhere else, is the ability to link across the various pension pots which individuals have with different providers, thus generating unprecedented levels of insight for both pension providers and Government.

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About the Pensions Data Project

Participants in The Pensions Data Project include:

as well as PwC, who will be processing the data on behalf of The Pensions Data Project.

In the UK there is currently no central longitudinal research base of people’s total retirement savings. This exists in other countries (such as the USA) and is a powerful tool for evidencing how individual citizens’ retirement savings, aggregated across their different schemes and providers, are evolving over time.

Discussions about establishing such a research database for the UK have taken place for many years, across Government and the pensions industry. The Pensions Commission identified this data deficiency for making evidence-based policy in their First Report in November 2004. More recently, discussions about addressing this need for evidence have been led by the PPI.

Initially, data will be aggregated across the Defined Contribution (DC) pots which individuals have with different trust based providers, thus generating insights for both pension providers and Government. In the longer term, there may be an opportunity to provide other industry-wide insights on the adequacy of individuals’ total retirement savings, and their resulting incomes, by linking to:

Private Beta

The current Private Beta Phase builds on the Proof of Concept and focuses on aggregating live data across multiple master trust members, People’s Partnership, Legal and General, Nest, NOW: Pensions and Smart Pension.

The Private Beta Phase is deliberately limited in scope. It is working as a proof-of-concept for the longer-term ambitions, as well as delivering an important set of initial findings. It seeks to answer the following types of questions:

How many pension pots do people have?

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How often do they move providers?

How much is their pension wealth? How does this change over time?

The Pensions Data Project Private Beta Phase has been kindly sponsored by a consortium of funders; The Association of British Insurers (ABI), the Department for Work and Pensions (DWP), the Pensions and Lifetime Savings Association (PLSA) and The Pensions Regulator (TPR).

Click here to read The Pensions Data Project first Briefing Paper

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Structure, Governance, Management & Risk

The Board of Trustees

Trustee and Committee Composition

Trustees can serve for a maximum of three terms, and the Chair of Trustees can serve for a maximum of two terms. The terms are made of up of three or four years, depending on rotation. In accordance with the constitution, the minimum number of Trustees in office at any given time must be seven, the maximum number is fifteen persons.

Constitution and Objects

The Institute was formed on 22 January 2001 and is registered as a charitable company limited by guarantee. It is governed by its Memorandum and Articles of Association (‘constitution’).

The principal object of the Institute is the advancement of education for the benefit of the public by the promotion, on a non-political basis, of the study of, and the dissemination of the useful results of the study of, pensions and other provision for retirement and old age, and the economic and social effects and influences of existing arrangements and possible changes to them. There have been no changes in its objects since the last Annual Report.

Members’ (Governors’) Liability

As a company limited by guarantee, the Institute has a maximum of 120 members (‘Governors’). Governors have voting rights and their responsibilities are as stated in the Institute’s constitution. As members, Governors guarantee to contribute an amount not exceeding £1 to the assets of the Institute in the event of winding up.

Governors are selected based on their expertise in pensions, retirement or finance. They are invited by the Board of Trustees (as detailed in the constitution) in a personal capacity, and they are responsible for helping to preserve the Institute’s objects, the independence and impartiality of the Institute, and to ensure that no interest group is able to exert undue influence on the Institute’s work. Although Governors are responsible for helping to preserve the independence of the PPI, the role of Governor is non-executive and Governors are not responsible for the Institute’s work and do not speak on behalf of the Institute.

From time to time, members of staff or Trustees may approach Governors to seek their assistance:

The full list of Trustees who served on the Board during the period ending 31 January 2023 is listed below:

• Madeline Forrester (Chair of Trustees, appointed June 2022)

Governors are free to accept or reject such requests for assistance.

We expect to revisit the role of Governors over the next 12 months.

117 Governors served during the period ending 31 January 2023, and current Governors are listed on the PPI’s website and can be found here.

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Trustees have the power to appoint Committees. The Institute currently has four Committees. Terms of References have been reviewed and updated by the Board during the year for all four Committees.

Finance, Audit & Risk Committee Committee Chair: Lynda Whitney

Funding & External Relations Committee Committee Chair: Darren Philp

Provides financial oversight for the PPI, monitoring the financial administration and risk management of the PPI and report to Council on the PPI’s financial health.

To provide intelligence which strengthens the Institute’s funding model and external relations, helping support the Executive in developing medium to longterm strategic objectives.

Governance & Nominations Committee Committee Chair: Katie Banks

Provides oversight of the Board’s governance arrangements and leads on the recruitment and selection of Governors and Board Members.

Trustees meet quarterly, to take strategic decisions and to review the performance of the Institute. During 2022 they also held two separate strategy days to discuss strategic issues outside of routine meetings.

A review of the skills expertise and diversity of Trustees, and the group of Governors, is undertaken annually. Governors are invited to update their information, skills, and expertise biennially. The Board are actively looking at broadening the diversity of the Trustees and the Governor body.

All new Trustees undertake an Induction process which provides them with more indepth information about the Institute and an understanding of what is required of their role on the Board. It includes a variety of activities spread over a period of time including meetings with and introductions to relevant Board Members and staff, invitations to events, meetings and presentations and invitations to attend Trustee training.

They also receive a Trustee Induction Pack which includes the history and current activities of the Institute, details of the policies and procedures and governance and management information. Throughout the year, Trustees are encouraged to attend training for continued personal development and to remain up to date with relevant issues relating to their role.

Remuneration Committee Committee Chair: Natasha Wilson

Approves issues relating to the remuneration of staff, with specific responsibility for making recommendations to the Board regarding the PPI’s Remuneration Policy and the Director’s remuneration. It provides assurance to the Board that the PPI has an effective pay and performance policy in place.

Conflicts of Interest Registers are kept up-todate and are reviewed by the Board of Trustees on an annual basis. A record is maintained of Related Party Transactions of Trustees who are employed by, or may appear to have influence on, organisations who are Supporters or sponsors of research. The details of them are in the Notes to the Financial Statements on page 35.

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Trustee Responsibilities

Trustees (who are also directors of the Institute for the purposes of company law) are responsible for preparing the Trustees’ Report and the Financial Statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. They are also responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Company and charity law requires Trustees to prepare Financial Statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these Financial Statements, Trustees are required to:

So far as each of the Trustees are aware, at the time the report is approved:

The Trustee retiring and not standing for re-election at the 2023 AGM is:

Trustee elections

In addition to an open recruitment process, Trustees are elected and co-opted in accordance with the constitution.

At the Annual General Meeting on 22 June 2023, one third of the Trustee Board (excluding the Director), or the number nearest to but not greater than one third, shall retire from office. The Trustees to retire in every year will be those who have been longest in office since their last election or appointment. All retiring Trustees shall be eligible for re-election if they have not served the maximum number of terms.

Anthony Tomei CBE, who has served as a Trustee and a Finance, Audit and Risk Committee Member since 2013.

On behalf of the Chair of Trustees, the Board and the the PPI team we would like to thank Anthony for his commitment and support of the Institute during his tenure.

Management and Staff

The Senior Management Team consists of Chris Curry, Director of the Institute, with overall responsibility for leading and managing the Institute, and Sarah Luheshi, Deputy Director, with overall responsibility for the research programme. Chris is also separately employed by the Money and Pensions Service (MaPS) as the Principal of the Pensions Dashboards Industry Delivery Group.

In total, there is a core team of nine full-time and two part-time members of staff. In addition to three Research Associates who work with the Institute on a consultancy basis.

The Institute is pleased to offer internships and secondments.

Further details about the PPI Team can be found here.

Equity, Diversity and Inclusion statement

The Institute recognises and promotes the values of diversity and inclusion as fundamental to all our policies and practices. Everyone is different and has something unique to offer. The Institute wants to respect and understand these differences and to make the most of everyone’s background, talents and abilities. We are committed to promoting an inclusive environment where all can be themselves, are valued for their differences, and are supported to work at their best. We therefore aim to ensure that the values of inclusiveness, diversity and respect for all are embedded into everything that we do. This includes identifying policy initiatives which are likely to reduce inequalities in the UK Pension system.

In 2022, we announced our partnership with 10,000 Black Interns. The programme was founded in 2020 to address the under-representation of Black talent within the Investment Management industry. They are a registered charity working with companies across

more than 25 sectors to provide insight into industry for Black students through paid internships. Joel Redgewell worked with the PPI during the summer

of 2022, and his contract was extended to cover the needs of the Institute until early 2023. He supported both the Operations and Research Team during his time with us. In 2023, we look forward to welcoming our second intern via the programme.

We have an ongoing commitment to ensuring that everyone working or engaging with us are not subjected to practices that lack of diversity, exclusion or lead to inequality. During 2022, the team completed the ten-month diversity programme looking at Courageous Development. Workshops were held with the Trustees, reviewing colour profiles, an inclusive culture and mutual expectations. We continue to review our culture, processes and procedures and update where necessary taking account of our learnings.

Remuneration Policy

In accordance with the Charities SORP, the Companies Act 2006 and the Charities Act 2011, the Institute disclose the following:

The Institute has a Remuneration Committee, which meets annually, and is comprised of three Trustees with relevant skills and expertise in HR and employee benefits. The Director is in attendance (leaving for the discussion about their remuneration).

The main responsibilities of the Remuneration Committee are to:

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other significant individual recommended changes (such as large increases or no increases), on an annual basis in time for the year end, and on other elements of the PPI staff remuneration scheme as necessary.

The Institute is committed to ensuring that its staff are paid fairly and in a way that ensures it attracts and retains the right skills to have the greatest impact in delivering our charitable objectives.

The objective of the Remuneration Policy is to ensure that the Institute’s staff are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their contributions to the Institute’s success. The appropriateness and relevance of the policy is reviewed annually.

Gender Pay Gap

As of 31 January 2023, the median annual salary was £35,039 (2022: £37,850) and (mean) average was £38,821 (2022: £40,743). Within the Senior Leadership Team*, excluding the Director, the mean annual salary was £55,588 (2022: £56,482). 60% (2022: 57%) of the Institute’s employees are female and, within the Senior Leadership Team, the gender balance remains 67% female and 33% male (ratio 2:1). The gender pay gap across the Institute is 3% and the median to the top ratio is 2.7.

*Senior Leadership includes - Senior Management, Head of Modelling, Head of Policy Research, Head of Finance and Operations and the Head of Membership and External Engagement

Risk Management

It is the responsibility of all Trustees to monitor the risks posed to the ongoing viability and ability of the Institute to fulfil its charitable objective. All areas of risk, governance, operational, financial, compliance, environmental and external are identified and set out in the Institute’s Risk Register.

The Trustees regularly assesses the major risks to which the Institute is exposed, in particular those related to the finances, operations and the reputation of the Institute, and is satisfied that systems are in place to mitigate its exposure to these major risks.

The Board of Trustees have delegated responsibility to the various Committees, but each Committee reports back to the Board on delegated responsibilities and for a collective decision on matters that are reserved for the Board. The Finance, Audit & Risk Committee oversee the Risk Management and review the major risks at each meeting.

In maintaining the quality and standard of its research, at least two Trustees review the Institute’s major pieces of research. Trustees and Governors are also selected to sit on specific research steering groups and the Institute has Research Procedures that are designed to ensure appropriate quality assurance of research and to mitigate the reputational and operational risk that could arise from the issuing of, or external resources circulating, factually inaccurate or misleading research. Governors are encouraged to monitor and provide feedback on the Institute’s research and activities to ensure they remain within the charitable objects and that the Institute retains its independent, evidence-based and balanced stance.

Once a year the Finance, Audit & Risk Committee reviews the proportion of research that has come from ideas from the sponsors of the research and the proportion where the topic has been chosen by the Institute before seeking sponsorship, to check on aspects of our independence.

Looking ahead to the next 12-18 months the uncertain economical and political environment means there is an increased risk and focus on the Institute’s finances:

Public Benefit

Trustees confirm that they have complied with the duty in section 17 of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission in determining the activities undertaken by the Institute. The Trustees’ view is that the Institute complies with this guidance because:

• The public benefits if the policy debate on pensions and retirement provision is informed by apolitical, independent and evidence-based research.

• Any individual or organisation can sponsor research from the PPI provided:

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2022 FINANCIAL REPORT Next •

Our Funding Model consists of...

Supporters Subscriptions Voluntary Donations Grants Earned Income from Research and dissemination activities

The balance and diversity of our income is not only essential for the ongoing viability of the PPI as it provides a regular stream of income but it is also important to ensure the PPI’s independence and impartiality.

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Review of Financial Position

Results for the year

2022/23

Sponsored Research £477,509 Supporters Scheme £351,892 Other Income £32,534 Interest £5,478 Donations £500

Total 2022/23 = £867,913

2021/22

Sponsored Research £535,585 Supporters Scheme £342,126 Other Income £42,755 Interest £2,366 Donations £188

Total 2021/22 = £923,020

In 2022/23, income decreased by 6% to £867,913 (2021/22: £923,020). Expenditure was maintained £903,435 (2021/22: £904,259). The outcome for the year is a £35,522 deficit. We believe this is due to a combination of the uncertain economic and political environment.

The Supporters Scheme has remained strong with the majority of Supporters renewing throughout 2022/23. We did, however, have one non-renewal at Associate Level. However, we are delighted to announce that in 2022 we welcomed two new Platinum Supporters, BlackRock and the World Gold Council.

Both organisations have embraced their Supporters benefits with BlackRock hosting the PPI’s 2022 Annual Supporters Event, Automatic enrolment 2032 Position & Policy Debate and the World Gold Council sponsoring research to be released in 2023.

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Total 2021/22
= £923,020
(Outer Ring)
Total 2022/23
= £867,913
(Inside Ring)
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Sponsored Research income was strong in the first half of the year, however, we did not secure as much research in the second half of the year due to the uncertainties that many were facing. The multi-year projects which have been secured, in addition to the Supporters Scheme help bring stability to our finances.

Other income was mainly driven by the virtual Knowledge Sharing Seminars which continue to be a success.

The PPI is registered for gift aid and individuals can donate through the individual donation scheme. The Institute does not engage in any specific fundraising activities or use third parties for fundraising activities. There were no fundraising complaints during the year.

Reserves

The Board has agreed a risk-based contingency type of reserve that has a range that is determined by the Institute’s commitments and strategic direction. The calculation considers the level of wind down costs and investment funds for capital and/or new projects/ activities where sponsorship has not yet been secured or there needs to be a cash injection for the activity to proceed.

The actual reserve range will be calculated according to these principles every year as part of the Budgeting setting process and kept under regular review during the year by the Finance, Audit & Risk Committee.

The targeted range for 2022/23 was determined to be £296,000 to £404,000 (2021/22: £196,500 to £393,000). It is the Institute’s intention to maintain a level of reserves in the range. The targeted range which takes effect from 2023/24 is £262,200 to £343,000.

In line with the Statement of Recommended Practice (SORP) for all registered charities, the portion of income that relates to the subsequent financial year is treated, for accounting purposes, as deferred income. The Institute received deferred income of £249,122 (2021/22: £196,942) and its total reserves at 31 January 2023 were unrestricted and totalled £282,419 (2021/22: £317,941). Unrestricted reserves, excluding amounts tied up in fixed assets were £278,709 (2021/22: £310,739). The Institute’s reserves are currently in the lower end of the targeted range.

Since COVID-19, the Institute has been keeping the reserves calculation and policy under constant review. Given the continued uncertainty of the external environment, the Board will review the longevity of the current Reserve Policy and calculation alongside strategy discussions.

Investment Policy

Under the Memorandum and Articles of Association , the Institute has the power to deposit or invest funds in any manner (but to invest only after obtaining advice from a financial expert and having regard to the suitability of investments and the need for diversification). Currently the Institute’s funds are held in cash as the Board does not think it prudent to invest in more volatile assets.

Appointment of Auditors

A resolution proposing that Haysmacintyre LLP be reappointed as auditors of the company will be put to the Annual General Meeting on 22 June 2023.

Approval

The report of the Trustees has been prepared in accordance with the special provisions relating to companies subject to the small companies’ regime within Part 15 of the Companies Act 2006.

This report was approved by Board and signed on its behalf by:

Madeline Forrester Chair of Trustees 25 May 2023

Lynda Whitney Chair of Finance, Audit & Risk Committee 25 May 2023

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Independent auditor’s report to the members of Pensions Policy Institute

Opinion

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

We have audited the financial statements of Pensions Policy Institute for the year ended 31 January 2023 which comprise of the Statement of Financial Activities, Balance Sheet, the Statement of Cash Flow and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Trustees’ Annual Report, Director’s Report and the Chair of Trustees’ Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In our opinion, the financial statements:

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Trustees use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Annual Report (which incorporates the directors’ report).

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of Trustees for the financial statements

As explained more fully in the trustee’ responsibilities statement set out on page 22, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of noncompliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to GDPR, charity law, employment law and company law, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and the Charities Act 2011, and consider other factors such as payroll tax and sales tax.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to income and management bias in accounting estimates. Audit procedures performed by the engagement team included:

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Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an Auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Tracey Young (Senior Statutory Auditor) For and on behalf of Haysmacintyre LLP, Statutory Auditor

10 Queen Street Place London. EC4R 1AG

25 May 2023

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Statement of Financial Activities for the year ending 31 January 2023 (incorporating income and expenditure account)

Balance Sheet as at 31 January 2023 Company Number: 04145584

Restricted Unrestricted Total Total
Funds Funds Funds Funds 2023 2022
Income Notes 2023
£		 2023
£		 2023
£		 2022
£		 Fixed assets Notes £ £ £ £
Tangible fixed assets 9 3,710 7,202
Donations - 500 500 188 Current assets
Income from charitable activities: Debtors 10 106,929 130,681
Research 2 40,962 820,973 861,935 920,466 Cash at bank 481,850 480,046
Investment income 3 - 5,478 5,478 2,366 --------------- ---------------
--------------- --------------- --------------- --------------- 588,779 610,727
Total income 40,962 826,951 867,913 923,020 Creditors:amounts falling due within one year 11 (259,910) (280,358)
--------------- --------------- --------------- ---------------
--------------- ---------------
Expenditure Net current assets 328,869 330,369
Expenditure on charitable activities:
--------------- ---------------
Research 4 40,962 862,473 903,435 904,259
Total assets less current liabilities 332,579 337,571
--------------- --------------- --------------- ---------------
Total expenditure 40,962 862,473 903,435 904,259 Creditors:amounts falling due after more than
one year		 12 (50,160) (19,630)
--------------- ---------------
--------------- --------------- --------------- ---------------
Net (deficit)/income and net - (35,522) (35,522) 18,761 Net assets 16 282,419 317,941
movement in funds for the year 7 ========= =========
Reconciliation of funds Institute funds
Total funds brought forward - 317,941 317,941 299,180 Unrestricted General Funds 15 282,419 317,941
--------------- ---------------
--------------- --------------- --------------- ---------------
Total funds carried forward - 282,419 282,419 317,941 282,419 317,941
========= =========
========= ========= ========= =========

The Financial Statements were approved and authorised for issue by the Trustees and were signed on their behalf by:

The Statement of Financial Activities includes all gains and losses recognised in the year.

All transactions are derived from continuing activities.

Madeline Forrester Lynda Whitney Chair of Trustees Chair of the Finance, Audit & Risk Committee 25 May 2023 25 May 2023

The notes on pages 30-34 form part of these Financial Statements.

The notes on pages 30-34 form part of these Financial Statements.

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Notes to the Financial Statement for the year ending 31 January 2023

Statement of Cashflow

2023 2022
£ £
Cashflows from operating activities:
Net cash provided / (used in) by operating activities 2,171 (3,783)
Cashflows from investing activities:
Interest received 5,478 2,366
Purchase of IT equipment (5,845) (4,783)
--------------- ---------------
Net cash used in investing activities (367) (2,417)
--------------- ---------------
Change in cash and cash equivalents in the reporting period 1,804 (6,200)
Cash and cash equivalents at the beginning of the reporting period 480,046 486,246
--------------- ---------------
Cash and cash equivalents at the end of the reporting period 481,850 480,046
========= =========
Reconciliation of net (expenditure) / income to net cash flow from
operating activities
Net (expenditure) / income for the reporting period
(as per the statement of financial activities) (35,522) 18,761
Adjustments for:
Depreciation charges 9,337 7,402
Interest received (5,478) (2,366)
Decrease in debtors 23,752 89,669
Increase / (decrease) in creditors 10,082 (117,249)
--------------- ---------------
Net cash provided / (used in) by operating activities 2,171 (3,783)
========= =========
Analysis of cash and cash equivalents
Cash in hand 156,619 156,023
Notice deposits (less than 12 months) 325,231 324,023
--------------- ---------------
Total cash and cash equivalents at the end of the year 481,850 480,046
A net debt reconciliation note has not been presented as the charity has no debt. ========== =========

1. Accounting policies

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:

1.1 Basis of preparation of Financial Statements

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) – (Charities SORP FRS 102) (Second Edition), and the Companies Act 2006.

The Pensions Policy Institute meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s).

1.2 Preparation of accounts on a going concern basis

The Board consider there are no material uncertainties about the Institute’s ability to continue as a going concern. The review of our financial position, reserve levels and future plans gives the Board confidence the Institute remains a going concern for the foreseeable future.

1.3 Critical Accounting Judgements and key sources of estimation uncertainty

In the application of the accounting policies, Trustees are required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects current and future periods.

In the view of the Trustees, no assumptions concerning the future or estimation uncertainty affecting assets or liabilities at the balance sheet date are likely to result in a material adjustment to their carrying amounts in the next financial year.

1.4 Company status

The Institute is a company limited by guarantee and does not have any share capital. The members of the Institute are the Governors named on the PPI website. In the event of the Institute being wound up, the liability in respect of the guarantee is limited to £1 per member of the Institute. It was incorporated in England and Wales on 22 January 2001 (company number: 04145584) and registered as a charity on 3 August 2001 (charity number: 1087856). The registered address is on page 36.

1.5 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Board in furtherance of the general objectives of the Institute and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors which have been raised by the Institute for particular purposes. The cost of raising and administering such funds is charged against the specific fund. The aim and use of each restricted fund are set out in the notes to the Financial Statements.

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1.6 Income recognition

All income is included in the Statement of Financial Activities when the Institute has entitlement to income, it is probable that income will be received and the amount of income receivable can be measured reliably.

1.7 Donations and legacies

Donations and gifts are included in full in the Statement of Financial Activities when there is entitlement, probability of receipt and the amount of income receivable can be measured reliably.

1.8 Income from charitable activities

Income from charitable activities is recognised as earned as the related services are provided. Income from other trading activities is recognised as earned as the related goods are provided.

funds administered completely independently of the Institute’s finances. The contributions made by the Institute are accounted for on an accruals basis.

1.13 Tangible fixed assets and depreciation

All fixed assets costing more than £300 are capitalised.

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:

Office Equipment 10% straight line Computer Equipment 33.33% straight line

1.14 Financial instruments

The Institute only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

1.15 VAT

The Pensions Policy Institute is registered for VAT.

1.16 Debtors

1.9 Investment income

Investment income is recognised on a receivable basis once the amounts can be measured reliably.

1.10 Expenditure

Liabilities are recognised as expenditure as soon as there is legal or constructive obligation committing the Institute to that expenditure, it is probable that settlement will be required and the amount of obligation can be measured reliably.

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

1.17 Cash at bank and in hand

Cash at bank and cash in hand includes cash and short-term highly liquid investments with a short maturity of twelve months or less from the date of acquisition or opening of the deposit or similar account.

1.18 Creditors and provisions

Expenditure is recognised on an accruals basis as a liability is incurred.

Charitable activities comprise costs of research and dissemination of research. These costs reflect staff time and direct costs along with an allocation of support costs.

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

Support costs have been allocated between governance costs and other support costs. Governance activities comprise organisational administration and compliance with constitutional and statutory requirements. Costs include direct costs of external audit, legal fees and other professional advice.

Governance and other support costs have been apportioned between all activities based on staff head counts and usage by activity. The allocation of governance and other support costs is analysed in note 5.

2. Income from charitable activities – research

1.11 Operating leases

Rental charges are charged on a straight line basis over the life of the lease.

1.12 Employee benefits

Total
Funds		 Total
Funds
2023 2022
£ £
Sponsored research 477,509 535,585
Supporter Income 351,892 342,126
Other income 32,534 42,755
--------------- ---------------
Total 861,935
=========		 920,466
=========

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3. Investment income Total Total 7. Net (expenditure) / income 2023 2022
Funds Funds
2023 2022 This is stated after charging: £ £
£ £ Depreciation of tangible fixed assets:
Bank interest receivable 5,478
=========		 2,366
=========		 - owned by the Institute
Auditor’s remuneration – audit services excluding VAT		 9,337
11,479		 7,402
9,785
Pension costs 67,350 60,482
========= =========
4. Expenditure Direct staff
costs
£		 Other direct
costs
£		 Support
costs
£		 2023
£		 During the year, no Board Member received any remuneration (2021/22: NIL).
During the year, no Board Member received any benefits in kind (2021/22: NIL).
During the year, two Board Members received reimbursement of travel expenses £253
Research 640,459 73,620 189,356 903,435 (2021/22: £144).
--------------- --------------- --------------- --------------- 8. Staff costs and employee numbers 2023 2022
Total 640,459 73,620 189,356 903,435 £ £
========= ========= ========= =========
Wages and salaries 610,615 619,301
2022 Social security costs 56,375 58,830
Other pension costs 67,350 60,482
--------------- ---------------
Research 707,705 48,098 148,456 904,259
734,340 738,613
--------------- --------------- --------------- ---------------
Total 707,705 48,098 148,456 904,259 ========= =========
========= ========= ========= =========
The average total number of staff employed in the period was 14 (2021/22: 14); including full-time staff of 11
Research Associate costs are included within direct staff costs but not included in Note 8 (2021/22: 11) and 3 (2021/22:3) part-time staff.
(staff costs and employee numbers) unless they have an employee contract.
5. Support costs include
Staff
Office		 Other 2023 The number of employees whose emoluments (excluding pension contributions)
the year was as follows:		 amounted to over £60,000 in
Costs costs costs 2023 2022
£ £ £ £
Governance 54,862 - 23,169 78,031 £60,001 - £70,000 1 1
Other Support costs 55,758 32,688 22,879 111,325 £80,001 - £90,000 1 1
--------------- --------------- --------------- --------------- --------------- ---------------
Total 110,620 32,688 46,048 189,356 2 2
========= ========= ========= ========= ========= =========
2022 The key management personnel comprises the senior management team and is made up of the following
positions within the organisation - Director and Deputy Director.
Governance 44,197 - 12,790 56,987
Other Support costs 49,493 24,992 16,984 91,469 2023 2022
--------------- --------------- --------------- --------------- £ £
Total 93,690 24,992 29,774 148,456 Salaries 167,256 154,248
========= ========= ========= =========
Social Security 19,428 18,849
6. Governance Total Total Pension 20,307 18,510
Funds Funds
--------------- ---------------
2023
£		 2022
£		 206,991 191,607
========= =========
Salaries 54,862 44,197
Audit and accountancy 11,479 9,785
Legal and professional fees 2,850 2,756
Other costs 8,840 249
--------------- ---------------
78,031 56,987
========= =========

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9. Tangible fixed assets Furniture,
fittings and
equipment
Cost £
At 1 February 2022 31,622
Additions 5,845
---------------
At 31 January 2023 37,467
---------------
Depreciation
At 1 February 2022
Charge for the year		 24,420
9,337
---------------
At 31 January 2023 33,757
---------------
Net book value
At 1 February 2023 3,710
=========
At 31 January 2022 7,202
=========
10. Debtors: due within one year 2023 2022
£ £
Trade debtors 50,761 105,430
Prepayments 25,157 14,982
Accrued income 31,011 10,269
--------------- ---------------
106,929 130,681
========= =========
11. Creditors: amounts falling due within one year 2023 2022
£ £
Social security and other taxes
Accruals
Deferred income (see note 13)		 24,186
25,906
198,962		 52,453
35,805
177,312
Other creditors 1,308 6,800
Pension 9,548 7,988
--------------- ---------------
259,910 280,358
========= =========
12. Creditors: amounts falling due after one year 2023 2022
£ £
Deferred income (see note 13) 50,160 19,630
--------------- ---------------
50,160 19,630
========= =========
13. Deferred income 2023 2022
£ £
Deferred income brought forward at 1 February 2022 196,942 337,714
Membership income received in advance 232,603 163,582
Sponsored Research received in advance 12,679 31,585
Other income received in advance 3,840 1,775
Released to Statement of Financial Activities (196,942) (337,714)
--------------- --------------
Deferred income carried forward at 31 January 2023 249,122 196,942
========= =========
14. Pension commitments
The Pensions Policy Institute contributes to a Group Stakeholder Pension Plan administered by Royal London.
The pensions cost charge represents contributions made by the Institute and amounted to £67,350 (2021/22:
£60,482).
15. Statement of funds 2022/23 Brought Carried
Unrestricted funds Forward Income Expenditure Forward
General funds 317,941 826,951 862,473 282,419
--------------- --------------- --------------- ---------------
Restricted funds
King’s College NMES Innovation Fund for Enterprise
& Engagement		 - 19,906 19,906 -
Which? Fund 21,056 21,056
--------------- --------------- --------------- ---------------
Total Funds 317,941 867,913 903,435 282,419
========= ========= ========= =========

Restricted funded projects

Briefing Note Number 131 - CDC: International Insights explores insights from three of the most established international CDC systems: the Netherlands, Canada and Denmark. Informed by the lessons that can be learnt from international experiences, the Briefing Note sets out some of the key considerations and challenges facing those responsible for design of CDC regulation and schemes in the UK. The research was funded by King’s College NMES Innovation Fund for Enterprise & Engagement.

Briefing Note Number 132 - The pensions policy impact of poor personal finance data on people from ethnic minority groups investigates what changes might need to be made to data gathering in order for policy to be better targeted and the retirement outcomes of people from some ethnic minority groups to be improved. The research was funded by the Which? Fund.

There were no restricted funds in the previous year 2021/22.

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16. Analysis of net assets between funds

18. Operating lease commitments

At 31 January 2023, the Institute’s future minimum operating lease payments are as follows:

Unrestricted Total ,
Funds
2023		 Funds
2023		 Building 2023 2022
£ £
£ £ within 1 year 22,116 37,914
Tangible fixed assets 3,710 3,710 within 2 - 5 years - 22,116
Current assets 588,779 588,779 ========= =========
Creditors due within one year (259,910) (259,910)
Creditors due after one year (50,160) (50,160) Operating lease charges made to the Statement of Financial Activities during the year totalled £37,914 (2021/22:
--------------- --------------- £15,797).
Total 282,419 282,419
========= =========
2022 2022
Tangible fixed assets 7,202 7,202
Current assets 610,727 610,727
Creditors due within one year (280,358) (280,358)
Creditors due after one year (19,630) (19,630)
--------------- ---------------
Total 317,941 317,941
========= =========

17. Related party transactions

17. Related party transactions
PPI Trustee Related Party Transaction
Darren Philp was an employee at Smart Pension during
the year.		 Smart Pension are:
•
Gold level supporters (£12,000)
•
Are board members of The Data Project
Private Beta.
Gavin Lewis is Managing Director at BlackRock. BlackRock are platinum level supporters (£18,000).
Jamie Jenkins is Director of Policy & External Affairs at
Royal London.		 Royal London are silver level supporters (£8,000).
John Chilman is Chief Executive of Railpen Limited. Railpen are gold level supporters committing for
three years (£35,640).
Lynda Whitney is a Partner at Aon Aon are silver level supporters (£8,000).
Madeline Forrester is Managing Director at MFS
Investment Management.		 MFS are gold level supporters (£12,000).
Sangita Chawla is Chief Marketing Officer at Standard Life
part of Phoenix Group.		 Phoenix are gold level supporters (£12,000).

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Reference &

Administration Details

The Board of Trustees and PPI Staff are very grateful to the many individuals and organisations that support the PPI as a thriving, independent research Institute.

For full details of the PPI’s Governors please click here to visit our website.

PPI Supporters at 31st January 2023

----- Start of picture text -----
Platinum Supporters Gold Supporters Silver Supporters
ABI AON
AXA Investment Managers Barnett Waddingham
Capita BP Pensions
Cardano Group Exxon Mobil
DWP The Chartered Insurance
Institute
Legal & General
LCP
MFS
MNOPF
Nest
PLSA
People’s Partnership
Quilter
Phoenix Group
Royal London
Railpen
Sackers
Scottish Widows
Shell
Smart Pension
USS
Which?
----- End of picture text -----

Associate Supporters

Brian Shearing & Partners Ltd NARPO OPDU RBS Research Team Greater Manchester Pension Fund NFOP Philip Bennett

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Administration Details

From an opportunity to add credibility to both your message and brand to actively becoming involved in the cutting edge of policy making, supporting the PPI offers you the opportunity to MAKE A DIFFERENCE.

If you wish to support the PPI and help shape the future of later life income provisions, please contact:

Danielle Baker – Head of Membership & External Engagement

danielle@pensionspolicyinstitute.org.uk

Company registration number: Charity registration number: Principle Operating Office & Registered Office

04145584 1087856

Pensions Policy Institute King’s College London, Virginia Woolf Building 1st Floor 22 Kingsway London WC2B 6LE t: 020 7848 3744 e: info@pensionspolicyinstitute.org.uk w: www.pensionspolicyinstitute.org.uk

Auditors: Solicitors: Bankers:

Haysmacintyre LLP 10 Queen Street Place London EC4R 1AG

Hogan Lovells International LLP Atlantic House Holborn Viaduct London EC1A 2FG

United Trust Bank 80 Haymarket London SW1Y 4TE

Unity Trust Bank Nine Brindley Place Birmingham B1 2HB

HR Support:

Advo Group advo House St Leonards’s Road Allington Kent ME16 0LS

All enquiries regarding the Pensions Policy Institute’s activities should be addressed to Chris Curry, Director at:

Pensions Policy Institute, King’s College London, Virginia Woolf Building, 1st floor 22 Kingsway, London WC2B 6LE

t: 020 7848 3744 e: info@pensionspolicyinstitute.org.uk w: www.pensionspolicyinstitute.org.uk

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PPI: Annual Report & Financial Statements