Tuesday, 16 September 2014

Instant Society

Yesterday was Pension Awareness Day. The BBC ran a pensions programme called Inside Out, looking at the pension cheats and the need to save. It even had a cameo performance from Steve Webb, chatting to pensioners on a bus.

Joan is 93. In the programme she comments on the cultural shift towards spending now.

'Nowadays, young people don't know how to save - because they've never had to save. It's a throwaway society. They've never had to make do and mend like we had to.'

There's something in that. In our instant, 40,000 googles-a-second society, everything is instant. Saving isn't.

Monday, 15 September 2014

Pension Awareness Day

Today is Pension Awareness Day. What started as a good idea has grown into a great event. Thank you to all those who have sponsored the day. Well done to Jonathan at Pension Geeks in getting it off the ground.

This is just year 1. What can we achieve in the year to come? How can we help people to think about pensions sooner? We’ve got the infrastructure, the products, the tax regime to help. But we still need to communicate the message.

That’s the Pension Awareness Day challenge.

Friday, 12 September 2014

From Ford Model T to Lamborghini

It’s nearly six months since Steve Webb made his controversial Lamborghini comment - that people should be able to use their pension savings to buy a Lamborghini if they want to. 

And it was the extent of the pension changes announced by George Osborne at that time that took us all by surprise. But six months on, with a lot of reflection, and considerable hard work from the pensions industry, we’re getting used to the idea, the flexibility. And to some extent, the increased simplicity and reasonableness of the changes. Annuities will still exist, but gone is the need for an annuity and with it, the effect of the fluctuations in annuity rates from month to month that created a lottery for the approaching retiree.

In its place is a need to communicate like never before. The trustees need to decide how to respond to changes that affect their plans (the Taxation of Pensions Bill is just out). And then they need to act. Members will need that oft-spoken of information that Steve Webb speaks of like never before.

We’ve come a long way from a prescribed defined benefit pension plan (the Ford Model T of pensions) to the Lamborghini type choice that awaits today’s pensioners. I think that’s good. But trustees need to start reviewing the changes early, and then to shout loud those changes to a workforce that still has a mental block the moment you mention the word ‘pension’.

Monday, 8 September 2014

Laughing All The Way FROM The Bank?

A survey from Fidelity, recorded in the Sunday Times, interviewing 500 people due to retire or planning to retire next year makes interesting reading. It suggests most are going to turn their backs on annuities and take all the cash they can. But how wise is this? Cash now, but poverty later?

Unless they are cautious with their new found wealth, they may well find it runs out a long time before they run out. Then what? In Australia, it’s called ‘double dipping’ – ie taking your pension as cash now and then relying on the State when you run out of money.

Is this what we can expect in the UK? Has the government relaxed the laws around pensions too much?

Monday, 1 September 2014

Pension Awareness Day

As likeminds rightly point out in their blog, one of the key messages on Pension Awareness Day is to encourage employers and pension providers to be more innovative in the way they communicate saving for retirement. 

Are we too quick to assume that people will read what we send them? Are we too reliant on words? Do we assume people respond to communications in the same was we do? 

Having been 83 days (and counting.....) without broadband at home (courtesy of BT Openreach incompetence), it's made me read more in print, text more and attempt to download stuff on my phone that I would normally read on a computer screen. It's been enlightening. The smaller screen on the phone means I skip more, just look at the headlines, respond to pictures more as they take up more of the screen.

I'm not suggesting that my one-man experience should be a key driver in our communications, but it does suggest that the particular communications aim of Pensions Awareness Day is the right one. 

Tuesday, 29 July 2014

Crossing Pension Borders

The idea of a Pensions Passport is not new, but its time has come. To have one location that holds all your pension information from the multiple employers you have worked for, all in the same format and all readily accessible is something that can be done with today's technology- and should be done.

It should hold all the State pension data together with any and every pension from other sources -all held in the same way, in recognisably the same format.

Management of data has come a long way in a short time. This kind of thing is now achievable. Borders between pension schemes in the UK can be crossed easily in this way and the full information available for advisers means they can concentrate on the advice and not spend endless months gathering the information in the first place. There's a growing enthusiasm in the pensions press for a Pensions Passport and it might just promote enough enthusiasm to get the job done.

Wednesday, 16 July 2014

Grey Gap Years

'.....the idea that people have one job that they do all of their lives is “history” and second careers will become increasingly common for the over fifties.' Here says the Pensions Minister Steve Webb in the Daily Telegraph.

He's right.

The retirement 'cliff' - in work one day, out of work for good the next day - is increasingly uncommon. And a good thing too. The shock of retirement has led to many an early death, due, I think, to a sudden lack of purpose and lack of appreciation.

With the recent pension changes, we are moving towards a Lifetime Savings Account (something I've championed before) and considerably more flexibility in how we take our tax advantaged savings.

It will also allow for the Grey Gap Year, another suggestion from our Pensions Minister. I'm not sure it will look like a student gap year. Shorter and possibly with more purpose to it (!), but a good time to step back from work, assess, prepare and move back in to part time work, or even a different career.

All possible thanks to these changes. And thanks to the internet revolution. So much can be done from home now. Whole careers can be built around access to the World Wide Web (he says, writing this from the local pub due to BTs complete inability to provide broadband at our new house so far!)