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Back in the day: April 1992

Back in the day: April 1992

This week we look back at to April 1992, which was the last time the Conservatives won a majority government. The issue of Money Management focused on second-hand life policies, a survey of free standing ACVs, and the problems and possibilities of pensions for women.

Second-hand life policies were a hot topic in the early 1990s. The estimated turnover for the market at the time was between £30m and £100m, estimated to equate to several thousands of policies. The article suggested that the second-hand market existed because most life offices gave poor value to with-profits policies that did not reach maturity, and that the market would likely not have existed if the surrender values of policies were more favourable to the policyholder. There were 10 market makers and agents, and a market maker who bought on their own account and then resold was the most common method of sale.

A survey of additional voluntary contributions (AVCs) found that one in 10 occupational pension scheme members made AVCs. The feature compared the costs and benefits of AVCs with free standing additional voluntary contributions (FSAVCs). An employer would choose the provider on an in-house AVC, whereas the individual could choose any company in the market for a FSAVC. The investment options of an AVC scheme are laid down by the employer, but an FSAVC generally offers greater investment choice and flexibility, but often higher charges than an AVC and delays in obtaining higher-rate tax relief.

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The issue went on to look at pensions for women - a radical concept at the time. The feature - written by a female reporter - said “the old days of women relying solely on their husband’s pensions are dying. A whole new market has opened up for women’s pensions, but there are problems”. Broken employment records made investment in personal pensions difficult for women, and even women who worked full time may not have been building up an entitlement to the basic state pension, which was £54.15 per week at the time. Advisers complained that the female pension market was difficult to tap into, and flexibility in pension planning is essential for women “whose career patter clearly differs radically from that of men.”

In other news…

The last Conservative majority government was elected in April 1992 - the party’s fourth consecutive majority government at the time. The election results took many by surprise as John Major won out over Labour’s leader Neil Kinnock. The SNP increased their total vote by 50 per cent in the election, campaigning under the phrase “Free by 93”, but could not make any increase on the three seats they already held . The election has a 77.7 per cent turnout, compared to 66.1 per cent in the election this year, and 65.1 per cent in 2010.

The top single on the UK charts in April 1992 was “Stay” by Shakespear’s Sister, and the top film was Steven Spielberg’s “Hook”, starring Robin Williams, Julia Roberts and Dustin Hoffman.

More Back in the day…