Belonging

There's some good thinking from LCP on the Brexit issue this week. In the end it may not be to do with economics, but more to do with 'belonging'.

Do we want to be part of Europe or not? To be on the outside may not be the best place for us in the long term, even if in the short term, the financials are not so bad as they are sometimes portrayed.

I prefer belonging to pulling up metaphorical drawbridges, but as the LCP article suggests, there's a lot of emotion and hot air in this debate. The Churchill quote is apposite:  “A fanatic is one who can’t change his mind and won’t change the subject”.

Being Bold on the Benefits of Pensions

Helen Morrisey’s clarion call in Professional Pensions to be ‘bold on the benefits of pensions’ is welcome.

So often, as pension professionals, we get caught up in the minutiae of the pension issues and forget the big message. But the big message is a simple one and needs saying as frequently as possible. And as simply as possible.

On the bus tour linked to Pensions Awareness Day, nearly 600 people came onto the bus during the week. And what did they ask? Details as to how S2P is changing? No. How to maximise their AVCs? No. What investments will give the best return? No.

Their questions were simple (see previous blog):

–      ‘What’s a state pension?’

–      ‘Do I get any pension from the Government?’

–      ‘Does my employer offer a pension?’

–      ‘Do I have to offer a pension?’ (from an employer)

–      ‘It’s all too complicated’

–      ‘There’s too much choice’

–      ‘Tell me what to do’

To quote Helen, ‘we need something simpler, cleverer and bolder’. Come on pensions communications companies- let’s be hearing from you!

Pension Awareness Day - Keeping it Simple

In September, the Pension Awareness Day bus travelled from Edinburgh to Manchester, to Leeds, to Birmingham, to London.

 

Over 600 people came on board during the week. Pension Wise were there, with different teams at each location. And the good people of Scottish Widows and People's Pension were on hand to help. Local radio broadcast us. Local newspapers interviewed us. An the pensions press supported us. (Thank you Pensions Insight and Professional Pensions for your encouragement.)

And what did those 600 people ask or say? Here's a sample:

–‘What’s a state pension?’

–‘Do I get any pension from the Government?’

–‘Does my employer offer a pension?’

–‘Do I have to offer a pension?’ (from an employer)

–‘It’s all too complicated’

–‘There’s too much choice’

–‘Tell me what to do’

 

You don't get much more basic than that. For all our pensions knowledge, sophisticated communications and strange looking monsters courtesy of the Government, we still need to keep to the simple messages.

Mirror.... Signal.... Manoeuvre...

Mirror... Signal.... Manoeuvre....  And off we go.

This years' Pension Awareness Day is gathering pace. And it's making even more of an impact as a bus is driven from Edinburgh to London via Leeds, Manchester and Birmingham.

The message is simple:  to promote the importance of saving for the future and to alert the nation that it is not saving enough for retirement.

If you're a pensions professional, a pensions company, or just plain interested in pensions, why not join us? It's not too late to sponsor the campaign. You get a lot of publicity - and more to the point, it's a strong altruistic statement that you care that the next generation has a pension!

Get on board! Here's the link: Pension Awareness Day.

Osborne's Plan for Pension Poverty

George Osborne is in danger of single-handedly destroying the pensions industry.

First, the so called pension freedoms. I’m not sure his opposite numbers in the DWP knew it was coming. Definitely his initiative- and with unforeseen (or seen and discarded) consequences. By copying the Australian model, we are in danger of opening up the nation to ‘double dippers’ as Australia calls them. People that take their cash, miss-use it, or miss-calculate and end up dependent on the State to survive.

And now a consultation document considering scrapping tax relief on pensions. Throughout my 38 years in the pension industry, alongside company contributions, the one thing that ‘sells’ pensions to youngsters is the tax relief. If pensions get treated the same way as ISA’s, then ‘goodbye pensions’. The industry becomes a savings industry, and over time (with unforeseen consequences and/or an uncaring Government), people will find that they didn’t save enough and can’t live on what’s there in retirement.

Short term treasury gains are in danger of sending the next generation into retirement poverty.

Time Will Tell

"The pensions industry has had over a year to prepare for the changes- and it is encouraging some firms have risen to the challenge. But others seem to be failing to move with the times...."

So says our new Pensions Minister Ros Altmann.

It's all to do with time, not 'moving with the times'. Every provider want to move with the times in the sense of moving with the market. But a year is an incredibly small time to turnaround one of the biggest pension changes in a century. Better not to offer than to get it wrong, as, I fear, many will, either in product or pricing.

Well done to Friends Life for not cashing in cheaply, but in reviewing what is best, and the timescales needed to do so. It may be resources. It may be the merger with Aviva. But better not to go there than to offer the product and fail.

The Daily Mail sees it as a U turn. Maybe it's more like parking up in a layby and letting the market mature first.

David Cameron needs to be careful in warning of a crackdown on providers failing to offer the 'freedoms'. Time (again) will tell whether those that have rushed to market have got it right.

Translating Pensions

Well done to Louise Farrand of Pensions Insight for her blog on pension phrases she would ban. I agree ‘On-Boarding’ is not a verb and never should be!

It got me thinking…..

How do non-pension people understand the jargon we throw at them? Maybe they don’t.

Here’s my own selection of pension phrases that may have very different meanings for the population at large. There’s a few you may have to think about first. Any more suggestions?


Abatement – A posh flat

Accrual – The opposite of kind

Actuaries - Flying performers

Amortisation – French for love on a train

Blended – A milk shake

Commutation – Travelling to work

Concurrency – A payment method using large shells

Discontinuance Basis – How shops sell end of line products

Fiduciary – Fido’s friend sees Harry (think about it….)

Glide path – Slipping over on a night out with the lads

Longevity Swap – Exchanging time share apartments

Middleware – Clothes worn in Lord of the Rings

Mortality Drag – Dangerous car racing

Offsetting – Losing at tennis

Pre-Crystallisation – Going into a jewellers shop

QROPS – Wheat

Tactical Asset Allocation – Winning on a games show

Targeted Return – Winning on a games show

Time Weighted Return – Getting fat

Wrap – From Pret

Yield – Wrestling manoeuvre

Zombie Fund – Clothes purchased for Emo wardrobe