Natural synergies between work and saving are plentiful but the most obvious one is that people tend to departmentalise their lifestyles so that the tough things – bills, savings and the the stuff of work while the fun things are done at home.
When employers make it easy for us by encouraging us to spend time at our desk organising our finances typically online these days, they do so for a reason. Solvent employees are more productive than those who worry all day over the bills waiting them when they get home. Employees with properly funded retirement plans are not only more relaxed at work but relaxed about leaving it.
It saddens me when I see the chances to save at work being spurned by so many.
One of my larger clients with a workforce of thousands has only 17% take-up for it’s well funded pension plan. Each month that goes by, over 11,000 of this firm’s employees spurn the opportunity to provide themselves with the security in old age that comes with receiving a proper monthly payment into their bank accounts.
I won’t go into arguments about what “proper” means. Whatever arises from a pension plan will never be enough to fully replace the standard of living enjoyed before retirement. But workplace savings schemes should provide much better pension outcomes than ones you set up on your own. I know, not only do I set up workplace savings schemes and negotiate their charges but I spent most of my twenties selling individuals individual personal pensions. I’m not proud of the individual plans I set up (though they were better than nothing). I am proud of the workplace savings schemes I establish these days.
This is why I am a reluctant enthusiast for auto-enrolment. “Reluctant” as I would prefer people to take the responsibility for saving through the workplace voluntarily. This was the vision for Stakeholder Pensions where the Government (naively) supposed that by making a decent quality workplace savings scheme available to staff, people would use it for their retirement savings. “Enthusiast” because I know that once people get into the savings habit, the habit sticks and auto – enrolment is the best way of getting people saving without turning that saving system into a pseudo-tax.
Asa parent I know that most children, when presented with a choice about doing something worthwhile and doing nothing, will chose to do nothing. However , if children are outwitted so they find themselves doing worthwhile things without their knowing it, they generally enjoy the experience and certainly look back at what they’ve done with pride and enjoyment – they typically want to do that worthwhile thing again – “worth the while”.
Nowadays, the quality of workplace savings schemes, not just of the retirement variety but the sharesave schemes large companies operate and the new breed of workplace ISAs that come within “corporate wraps”, are light-years away from the plans available to us twenty or even ten years ago. They are cheaper, have better organised fund choices, come with plenty of good quality information to help us take our choices and best of all we can see how they are doing through our computers (and hopefully in the not too distant, on our phones.
Sure there is still work to be done to make them better. We need to get the charges down on a lot of the schemes set up a few years ago – what we cutely call legacy arrangements. We need too to get help to those who are arriving at the end of their working careers so that the money they have built up is converted into savings and income in a sensible and efficient way.
The more I go on about how saving is boring and work is borning- the more excited I get about both! For me, the challenge, excitement and value of going to work is about getting people to share my enthusiasm!
Now there’s a sad sad sentiment!
- Life Without a Sustainable Lifetime Pension Is Not Simply Tough – It Is Unconscionable (beyondrisk.wordpress.com)
- ‘Lack of Pensions a Growing Concern’ (beyondrisk.wordpress.com)
- ‘More will save into pensions’ with retirement lottery, says expert (moneydebtandcredit.com)
- Pension plan just the ticket (lv.com)
- Choose your pay cut – DC PVO1 (henrytapper.com)
- Lack of pensions a growing worry (moneyville.ca)
- Early pensions use ‘to stop’ (lv.com)
- How late retirement affects your pension (independent.co.uk)
- Workers unaware about pensions (lv.com)
- Pension savers ‘should have chance to win £1m’ (telegraph.co.uk)
- Tell them the truth (a ridiculous notion) (henrytapper.com)
- Clearing up a few things around pensions (henrytapper.com)
- What we can and cannot do (to provide our staff with better DC pension outcomes) (henrytapper.com)
- Shift to defined contribution plans decreases retirement security for workers (washingtonpolicywatch.org)
- Workers ‘worried over pension’ (lv.com)
- Well Bull Butter And Bilge Water! (gadabout-blogalot.com)
- Why 401(k) plan won’t solve S.F.’s pension woes (sfgate.com)
- Marx, minimum wage, and room for improvement (analyfe.wordpress.com)
- Jaded on the Job (psychologytoday.com)
- Mr. @SavingStories goes to #NGS2011 (genjourney.wordpress.com)
- The NFL media is really bored (profootballtalk.nbcsports.com)
- A list of things to do when you’re bored and have no life (maybeifwebelieve.wordpress.com)