My heart goes out to Jo Cumbo as she pours over her provider statement. Jo is on the employer governance committee for the FT’s own workplace pension (I won’t mention the contract provider but it’s a household name).
Here she is on a Saturday afternoon, fulminating
Her frustration leads to her questioning what she’s in this contract for
She considers the user journey for customers like her and calls it a “faff”
and she concludes that workplace pension providers have a long way to go to offer a happy experience for long term savers.
Let’s be clear, Jo is in a group personal pension offered to one of the most prestigious employers in the land by a provider selected with due diligence. But she is left to deal with her pension issues with minimal help.
There is a problem here , let’s call it the “loneliness of the long distance saver“.
Bots are not enough
I have not drunk the techno Kool-aid and I do not think that putting rubbish information on an app will turn this around. I don’t think that offering a “bot” with a friendly name, will cure the loneliness of the long distance saver.
But it is a start. If pension providers cannot – by now – present information from their systems on somebody’s phone, I will. I’ll be your bot!
And if anyone is interested enough to view the full list mentioned at the bottom of this screen, I’ll allow them to compare one workplace pension with another
And if anyone asks what those numbers in circles are doing, I will explain. They are created using an algorithm that compares the value being given with the money you are paying for the fund and contract. It’s not hard to understand that.
Why so lonely?
Jo is not alone, there are 24.9m people who went to the Money Supermarket, only to find there is no pension aisle there!
There’s no Go Compare Pensions or Compare the Pensions Market either. If Jo currently wants to compare her workplace pension with everybody else’s , she’ll probably have to commission a piece of work from her firm’s employee benefits adviser.
Why are we making it so hard for people to find out the value they are getting for the money we are paying?
The IDWG has sent its report to the FCA, the FCA are ruminating on a template that will tell us how much we are paying for our fund management. A similar template is needed to work out how much we are paying for our pension contract (the platform on which funds sit).
It’s been a long time coming- but change is going to come. At some point in the future, what is now available to institutions, will become available to Jo and the millions like her.
I intend that that future is sooner rather than later!
The long distance saver
It is a long race till you get to your tipping point when you start spending the money you’ve been saving over the years. As a 56 year old, I can tell you that the closer you get to that point, the more you care about your money. Two reasons for me-
- there’s more of it
- I can spend it as I want
But as Jo’s second tweet properly puts it,
“if customers too stupid to understand fund performance, why is this company flogging drawdown to them?”.
The long distance saver is not only ill-served through the saving period, but they’re given no help in preparing for “spending”.
Hundreds of thousands of people reach 55 each year, clutching the pieces of paper that Jo has to work on. They may have ten or more setts of papers, all of which will talk at length but say very little. As Laura puts it…
People like Laura and Jo deserve better, they deserve an independent evaluation system that is the pension aisle in the Money Supermarket, they deserve to have the pension genome mapped with the same rigour as we mapped the human genome. Pension DNA should be analysed and from our understanding of it, we – the industry – should be able to produce a single number for everything that tells us what we need to know about value , money, engagement and the exit costs if people have had enough.
It really is time we got some movement on this! I look forward to giving regular updates on how I’m doing. It won’t happen overnight – it will still be a long time coming – but change is going to come!
It seems you have positioned yourself as a crusader in the field of pensions, and I have no doubt your intentions are well placed. What experience and qualifications do you have in this area? I am looking for some advice in respect of the transfer of my Final Salary pension from my previous employer.
I’m quite experienced but no longer a qualified financial adviser, if you contact email@example.com, I may be able to point you in the right direction (depending on what your query is)