While the former pensions minister, Steve Webb, warns in The Guardian that the UK’s ‘pensions lifeboat’ scheme is at risk from “a huge wave of corporate defaults” as a result of Covid-19, company collapses and corporate defaults are not the only threat to pensioner incomes caused by the pandemic.
Since the start of lockdown in the UK, Remit Consulting has been working alongside the RICS, BPF, and other industry leaders, to produce a regular analysis of rent and service charge collection levels. Based on the reconciled figures reported to investors by their managing agents the research has involved data regarding around 125,000 leases on 31,500 prime commercial property investments across the country.
Using the IPF’s market size data, we calculated that the shortfall in the March quarter equated to £1.5 billion. As we head toward the end of the June quarter, with collection rates following a near-identical trajectory, there is a strong prospect for a similarly bad quarterly shortfall and an income loss to the industry of £3 billion since the outset of lockdown is more than plausible.
This prospect is a big concern, as a fall in the income of the pension funds, REITS and other investors will inevitably hit the wider population. As The Guardian article highlights, the income of many pensioners and savers is reliant on the performance of these institutions.
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