I’m not Mike Barrett and this update is not about the Consumer Duty. It turns out you’ll have to wait a bit longer for that. Instead …
Friends, Romans, countrymen, show me your pension statements. In fact, let’s go to the pub and chat enthusiastically about retirement provision adequacy and risk-adjusted net returns. It’ll make a nice change from ruefully shaking our heads at the idiocies of the modern world while consuming slightly too much Doombar.
Kudos is being handed out today to the combined might of the DWP, the ABI and the PLSA for putting aside their ideological and commercial differences and collectively swinging behind a national campaign to PAY YOUR PENSION SOME ATTENTION. Ten points to Caxton House. It’s a catchy theme and who knows it may even catch people’s attention. A recurring theme of the last Pensions Minister’s record-breaking tenure in the DWP was his enthusiasm for pension engagement in all its hitherto neglected forms. Happily, the new Pensions Minister, who bears an uncanny resemblance to the last one, has carried on where his predecessor left off.
So everyone, the Government, MaPS, the pensions industry wants to get people more engaged with pensions. No one’s asked the consumer but I’m sure they’ll tag along. No one is underestimating the scale of the challenge: the most successful pension policy intervention since, well…ever, was built on deliberately avoiding engaging people with the fact we were putting them in a pension. Then along came pension freedoms and George Osborne’s solution to the annuity market. Now we need to engage people whether they like it or not. Millions of people are dependent on the decisions they make in relation to their pensions and half of them have got LITERALLY no idea what this entails.
When it comes to retirement, the FCA has been playing catch up these past seven years and still hasn’t really delivered a regulatory framework that properly enables people to benefit from pension freedoms while minimising the risks.
Take a look along the pensions high street though and this engagement schtick is already gathering some real momentum (no, not you Seamus). Guidance providers like Guiide and Money Alive are steadily filling the advice gap from the bottom up. Pension Bee is making a virtue of humanising pension planning (and probably taking business off a Bristol-based D2C platform in the process; but as we know, in the end revolutions eat their own children). And rather than waiting for the Pension Dashboard to be made flesh, fintech start ups like Penny are building and delivering their own pension finding services. This is the Hope in Pandora’s box of pensions complexity.
The bit that’s missing in all this brings us back to the government. Step forward and take a bow HM Treasury, the body that has done more than any other in recent decades to make pensions complicated and un-engageable to ordinary people. If we’re going to make pensions engaging we have to reform pension taxation. I don’t think we can expect the government to grasp this nettle willingly, so it’s up to us in the pensions and savings industry to roll the pitch for them and lay out a coherent, credible blueprint for pension tax simplification and reform. Until we do that, we’re going to be cycling uphill with a flat tyre on a mixed metaphor made for two. Do it.
ENGAGING LINKS (IF YOU LIKE THAT SORT OF THING)
- Anyone wanting to join the fun on the pension engagement campaign can register their interest here.
- The FCA’s first ever climate related financial disclosure was published yesterday. It’s the regulator’s attempt to meet the reporting requirements it’s set for firms and also includes its take on what climate risks might mean for firms and regulation in the future.
- There was talk at Mansion House last night on the future of financial regulation, ahead of the new Financial Services and Markets Bill being introduced today. The polite punch up between regulator and government on plans for post-Brexit reform continues.
- If you’re an advice professional, there’s just a week or so left to rate your providers for this quarter, so if you can spare us a few minutes to do this now, we’d be eternally grateful.
- Your musical accompaniment is Alt-J’s Hard Drive Gold, not so much because a paean to cryptocurrency investing scores a solid 10/10 on the irony meter in this week of pension engagement, but mainly because I’m hoping it’ll annoy Mark Polson.
We’re pretty sure you’ll be hearing from Mike next week. Bye for now.