Getting “generation rent” to save for later.


Matthew Vincent has some fun in the FT at the expense of the chin hairs, the Digital Garages and the “app’ll fix it” culture among pension strategists.

You can read the fun here . (provided you’ve got your FT subs to date.

If you haven’t, you might want to think things through from a 20 year old’s point of view.

One of the surprises about auto-enrolment is that it is those in their 20s (generation rent) who are least likely to opt out of making pension contributions. This is commonly assumed to be because they don’t care about their finances and don’t pay attention to payroll deductions.

Anyone who thinks this to be the case is both stupid and out of touch.

Equally patronising to young people is the notion that an app will make saving serious. It will do the opposite, apps are useful for people in the later part of the saving phase and particularly helpful for those using their pension to help with cashflow management. But apps are totally useless as a means to see the money you haven’t yet accumulated.

Talk to anyone in their twenties and the financial priorities are much the same

  1. being solvent to pay the bills (whether from the cashpoint or digitally
  2. having the means or at least a plan to stop renting
  3. managing debt – whether from studies , pay day loans or in extreme cases , with the dealer.

That 20 year olds are staying in workplace pensions (and opting in when under 22) is testament to their idealism. There is something very pure about putting money away for 40 years time, it appealed to me when I was young and I can remember why.

I liked the idea of being a Grand Dad, I liked the idea of having money coming to me when I couldn’t earn, I lived the dream of getting old before I was over being young.

Young people are deeply serious about this. It is only later in our lives that the cynicism sets in . There is a song of innocence and it is different from the song of experience.

Instead of the patronising savings games arriving from the Digital Garages, we should be having the serious conversations with young people that young people want. That means talking about tough things like what makes for good very important.

I can think of nothing that would so disinspire me to save than to be sold as app in place of a proper education about lifetime saving. It is disgraceful that we think young people don’t want (let alone need) to know about the impact of inflation, the growth and income properties of real and fixed assets, the cost of providing a lifetime income and the help they will get from the State through taxation and the payment of national insurance.

IF an app took these matters seriously, then I would praise the app, but as the apps I see consider such tough subjects counter-productive, I will have no time for them. In my own firm we are designing an app, the talk is of how much truth we should embed in what we let our staff discover. Would the harsh realities that govern their life be dumbed down so that £20 per month into a lifetime ISA makes a house and a happy retirement an expectation?

There is only so far nudge can go. In the end we need to have spent hard and long on our retirements.

The initiatives that are catching Matthew Vincent’s eye, are catching my eye too

  1. Steve McCabe MP’s call for tax incentives to be targeted at the youngest savers
  2. Kate Smith (Aegon) and her proposals to link pension payment to the alleviation of student debt
  3. Ros Altmann’s uncompromising opposition to confusing saving to get on the housing ladder with a panacea for retirement poverty

The conversations these people are having address the real concerns of youngsters. When I was advising Eagle Star around the turn of the millennium I predicted that “portals were for show  and platforms for dough”. I meant this in the most cynical of ways. If we wanted to show off, we built portals and if we wanted to rake in money, we built platforms. We did both and made a fortune.

We do not need to invest in fancy portals and the white elephants called platforms. We need to invest in financial education around “boring money” and in products that do what we claim for them.

Maybe we could find a new word for this feeble fumbling after relevance. I suggest “app”ostasy.




About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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