I received this blog/testimony from Darren Jefferson, who many will know for his work in setting up auto-enrolment schemes over the past five years. The title’s my own, the words are his.
Don’t take other people’s money for granted.
A few weeks ago I had a trip up North to meet up with some of my old mates.
I grew up with these guys and taught martial arts for years to their families and friends. Having the karate club gave them something to focus on and take their anger out in a controlled environment.
They earn well below the national average salary and hardly have anything left at the end of each month after rent, utilities, food, kids clothes, petrol and a small holiday fund.
They all work hard, provide for their families and are genuine blokes but are also realists. They realise that over the next few years some of the roles they undertake may well be taken over by robots.
As we reminisced I brought up the subject of pensions, auto enrolment and increasing contributions. That’s when it got colourful..
Some of the comments that came out are below. I’ve toned down so as to remain professional:
‘Do these pensions experts realise that we have no spare cash at the end of each month. We can’t afford to save more into a pension’
- ‘These people need to get in the real world. We are living hand to mouth and just surviving’
- ‘We know we won’t be able to retire and the state pension will be a lot less, if there at all’
- ‘Tell these pension people to stop sending us stuff. There’s too much of it, we don’t understand it and we will be coming out of the pension as we can’t afford the increased contributions. They’re wasting their time’
‘We work hard and want some pleasures. A pensions bloke once told us that if we gave up a few pints we could save that in a pension. What planet are they on?’
I only met up with 10 or so but they did say that their views are representative of a large part of their community. I’m sure this will be the same in other parts of the country.
So as the Master Trusts prepare to receive increased contributions, consultants think about possible DC strategy work spare a thought for my mates in Leeds. They genuinely can’t afford these increased costs but they are not expecting the State to bail them out.
I don’t have the answers and these discussions will continue but don’t forget those who the system is aimed at.