V-FM Pensions #151: LCP's Sam Cobley

In this episode of V-FM, hosts Darren and Nico chat to LCP’s Sam Cobley discussing the role of Collective Defined Contribution (CDC) in the UK pensions system. Sitting between DC and DB, CDC pools members with the aim of delivering a more stable retirement income, but requires savers to give up some of the flexibility offered by DC. The discussion centres on whether the potential income uplift is large enough to justify that trade-off.

Sam challenges some of the more optimistic claims about CDC outcomes, with Nico coining the term “CDC washing” to describe estimates of 50–75% higher incomes based on outdated comparisons with annuity-targeting DC strategies. Sam’s recent analysis suggests a more realistic improvement of around 15–25% compared with modern income-drawdown DC approaches, reflecting how rapidly DC investment strategies have evolved.

The conversation explores how CDC could work in practice from cohorting and buffers, to which retirees it may suit best. While CDC could offer better value for certain cohorts, particularly those seeking income stability, its success will depend on careful design, fair pricing, and how it competes alongside an increasingly sophisticated DC market.