It’s only human nature after all!



It’s natural for us to crave money but we are not natural money saving experts. Debate has raged on this blog and on the Pension Play Pen group pages as to whether Pensions Wise is doomed along with the financial education agenda.

For those with an eye to the “most vulnerable” as our masters refer to the poor, the idea of a pension dashboard is ludicrous, the difference between a good and bad week may come down to whether there is a pound coin left on Sunday to feed into the meter. Universal credit (formally introduced today) presents a budgeting nightmare to those for whom week by week cashflow management is “financial planning”.

Not surprising that there is such national outrage at the failure of our tax authorities and our leading commercial bank to prevent or investigate the theft from the Treasury of millions of tax payers pounds that could and should have been shared through society. We live in a tolerant country, if we didn’t, then rocks would have been thrown.


With these sharp divisions between the richest and the poorest, we forget those in the middle who want to become money saving experts , have been offered pension freedoms but are frustrated by the state of change.

I am one of those people, but I’m in the fortunate position of having access to technology and people to apply that technology to educate and empower people to manage their finances more effectively.

One person who I hope I can build a relationship with over the next few years in Mark Hoban who, having been a Treasury Minister, is resigning from parliament to pursue a private career. If you think this man is just out to cash in on former glories you a) haven’t met him and b) haven’t read his pamphlet “RetirementSaverService” (RSS) published by Reform last month.

Pension Wise

Mark’s vision is of a second line of support (Pensions Wise being the first) that can be offered to ordinary people who want to know what they’ve got when they get in their 50s  and 60s and what they can do with it. There are two key elements to this support

  • Creating a single view of someone’s pension savings, state pensions and other assets, and
  • Developing a digital guidance service.

The biggest barrier to doing this, in his opinion is regulatory. In this he and I are one. I’m encouraged that the FCA are addressing this issue, particularly encouraged that they have established “Project Innovate” which (among other things) aims

to identify areas where our regulatory framework needs to adapt to enable further innovation in the interests of consumers.

I intend to use this support from the Regulator as my firm increases digital guidance not just to employers (choosing workplace pensions) but to those wanting to help their staff take financial decisions in the workplace.

Increasingly, employers are seeing the place of work as one where people can focus on managing their money. Employers recognise that employees are more productive when they are solvent and even more productive when they are working towards clear financial goals. Providing people with financial guidance in the workplace is something that many employers want to do.

This is how Government and Financial Services organisations can work together to make the most of the new freedoms. The freedoms are nothing if we don’t know how to or are prevented from using them.

For many people, the idea of viewing their money on a pensions dashboard and “narrowing” choices by means of digital guidance will be exciting, to many it won’t.

At those who can’t or won’t manage their own retirement incomes, we should not be pointing fingers. Most people would rather do other things;- it is only human nature after all. For many people, packaged solutions such as annuities (and CDC) which deliver greater certainty (albeit with less flexibility) are the obvious alternatives.

So just as we need to build the dashboards and digital guidance services, we also need to build new ways to drawdown our retirement savings. This is why we have a defined ambition program which picks up the slack.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in Financial Education, First Actuarial, Pension Freedoms, pension playpen, pensions and tagged , , , , , , , , . Bookmark the permalink.

4 Responses to It’s only human nature after all!

  1. andyjags says:

    I agree Henry that the big issue is the people in the middle.
    But you illustrate one of the big problems by thinking that you are in it. Far from it, either finance wise (I guess) or “Pensions wise” wise.
    Pensions etc people like to think themselves in the middle and naturally design systems around that including behaviours as well as basic understanding. I know they try to dumb down but often fail at the most basic stages.
    We do of course need digital guidance services, and needed them before but no one offered and government did not push for them until they introduced Freedom and Choice.and quickly discovered that the idea of Advice for all was not the solution they expected. But i fear such guidance will be for the few, the top slide of the “middle” and anyway I have still to see exactly how the process deals with the uncertainty over how long people will live.

    So I strongly agree that we need simple solutions, which can be regarded as the new way forward on defined ambition as you say, as the original ambition seems likely to be redundant before it gets off the ground.

    Incidentally, on another topic mentioned in this blog, I can see that larger employers see the workplace as the place where people can manage their money. Otherwise what would the pensions managers do there now that pensions are set to become simpler? But it is hard to see that being true for the vast bulk of smaller employers.
    As with default for the at retirement savers, we still need a simpler default mechanism for micro employers who would rather be doing other things than trying to select a provider for the few employees.

  2. henry tapper says:

    Thanks Andy – can’t disagree!

  3. Kate upcraft says:

    Henry there is another dimension to this need for financial awareness and that is early education and data ownership. Many of us in the employer/payroll space are alarmed by how little knowledge youngsters have on entering the world of work of the realities of tax, NI, student loans and yes ultimately pensions. Despite promises to include financial education in the curriculum there is no evidence of this improving (my own children aged 17 and 19 have had none and just rely on their nagging payroll obsessed mother). Those youngsters are the savers for whom auto enrolment must deliver and yet like most employees they feel that tax, NI and pensions are done to them and for them by their employers. The introduction of RTI reporting and the corruption of taxpayer and employer data by HMRC systems means more then ever we need individuals to engage with and own the data that is held about them. HMRC are driving this with the announcement of PAYE online for employees – a dashboard to be rolled out to 39m employees and the provision of tax summaries to all SA online filers for 14/15. HMRC’s motives are less about data ownership and engagement and more about not having the resources to send out paper information or answer the phone but that’s another story. Not only must we ensure today and tomorrow’s employees understand what data is held about them, we also want them to play a part in making sure it’s right so when they come to rely on it for a pension in years to come they don’t have a terrible shock. I’m in total agreement that a new administration needs to undertake a root and branch review of HMRC but for me it’s not about tax favouritism it’s about establishing ministerial oversight so that our tax authorities don’t act as judge and jury in spending our taxes on computer systems that can’t accurately record those taxes (or the NI that we will rely on in years to come to provide single tier)

    • henry tapper says:


      This comment puts a completely new slant on financial empowerment.

      I feel completely out of my depth responding, it would be great if you could publish these thoughts in a blog!

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