No shit bro!
A new man
In one of the lowest keys of appointments, Richard Harrington crept into the DWP as an under-secretary and inherited all the issues for rather less pay than he’d have got if he’d got the usual ministerial salary.
The pension industry took this as a downgrade in the perception of Government of the pension problem.
Instead of a pension celeb, pensions got Richard Harrington, who nobody knew much about. Though he looks like he does a good job of “stand up”
just like that
I asked Gregg McClymont of his view on Richard, and with typical candour Gregg gave him the thumbs up. He’d worked with Richard on a Government Finance Committee and found him a businessman, numerate and sharp of judgement. I also got the impression that (despite their political differences) , he liked the man.
This cheered me up (as does this photo of the man in the silver tux). There’s a comedian in there waiting to get out!
gilt-edged humour
A new approach?
Richard Harrington hasn’t made much noise since his appointment , but he has given a statement to Natalie Holt of Money Marketing which you can read here. The statement claims to be in Richard Harrington’s own words though I very much doubt that’s the case. It’s carefully balanced not to offend and it covers all the areas of policy that Ros Altmann was tackling before her departure.
What is interesting is that either Richard or one of his policy team, chose to publish through a paper dedicated to IFAs and to others involved in retail financial services. It would have been possible to have spoken to the trade press read by trustees and their advisers.
Those in high places in the pension firmament will no doubt feel doubly snubbed. I don’t blame them, they have long regarded pension policy as something which they informed upon and those in retail fed from the crumbs at the table.
It looks as if that is changing. This is a good thing. We need some bottom up policy making. The people who need to be listened to right now are busy exploring payroll interfaces for auto-enrolment, considering how to use the Blockchain to bring down administration costs (and risks) and working on advising the millions of us trying to work our how to eke our pension pots into adequate income streams in retirement.
A new opportunity
Though we have lost a great campaigner in Ros Altmann, we have gained a minister who is an MP and one who has served in two Governments. I’d hope that his experience of how things work in Westminster will hold him in good stead.
He inherits the DWP Select Committee, under the formidable Frank Field, that is firing on all cylinders. I have great confidence in them, they are holding the DWP to account and Richard is going to get no easier ride than his predecessor did. They are asking the right questions.
i have great confidence in the DWP’s private policy team and though I don’t agree with everything they do (their over-promotion of NEST as a safe harbour, their failure to properly tackle net-pay), I am impressed with them collectively and individually. The head of Private Pension Policy (Charlotte Clark) is a Civil Servant of the highest calibre.
So – despite the noises of misery emanating from the pensions glitterati, I’m looking forward to having a new Pensions Minister in Richard Harrington.
- The DWP tell me they are working towards a new charge cap in 2017 – bring that on.
- They have called for help on the auto-enrolment review in 2017 – bring that on.
- They are busy strengthening the protections we will get when investing in workplace pensions – bring the new Pensions Bill on.
- They are calling for evidence on how to strengthen the effectiveness of tPR to minimise gaming against the PPF
Richard Harrington set out his task like this
As Pensions Minister my role is to ensure that pensions is at the top of this Government’s agenda. I am absolutely committed to this. The pensions industry has already done a fantastic job to get us to this point and I see my role very much to ensure our plans stay on track. I look forward to working with you all.
That seems a good place to pick up from where Ros Altmann left off.
a touch of humour helps!
Mr Harrington says in that article link:
“It is astonishing, but true, that someone who starts saving at the age of 21 and then stops at 30 will end up with a bigger pension pot than someone who starts saving at 30 and puts aside money for the next 40 years. We need to get that message out there – the sooner people start saving, the better.”
There are some heroic assumptions in there about all kinds of things from asset allocation and charges to entry and exit levels.
Is it a helpful statement? I don’t think so, even although I don’t agree with expectations around pound-cost-averaging of the regular, older saver.
George – there is a savings habit – some people get it – some don’t. The AE opt-out figures suggest that older people opt-out more than any other group – those who don’t start saving young – don’t seem to save at all. I’m with the Pension Minister – though I haven’t seen the Maths.
There’s an example of the Maths here, Henry:
http://www.investopedia.com/ask/answers/05/nestegg.asp
It presumes high rates of compounding.
New (even young) savers with Nest get capital protection for five years and nothing like these American compound rates later in life.
The DWP (and GAD) should be asked to justify these claims.
The idea that you save from 21 to 30 then stop and just let the money compound is madness.
Mr Harrington seems to read The Daily Telegraph:
http://www.telegraph.co.uk/finance/personalfinance/investing/10742396/When-saving-for-10-years-pays-more-than-saving-for-40.html
Ah – you should be in charge of this blog – George – excellent snooping!
Good to know that the Telegraph is in charge of pension policy. Money Marketing’s star reporter (Sam (bad ram) Brodbeck) has recently made the move to the Torygraph!