Let’s make “Legacy” a thing of the past.


It’s hard not to feel a twinge of sympathy for Richard Smith.

But I don’t.

This zealous reformer like Michael Johnson, sees the answer in sweeping changes rather than the incremental (and messy) changes we have seen in the past fifty years.

But sweeping changes are massively destabilising. Even the pension freedoms, no more than an amend in the taxation of pension withdrawals, can cause unexpected consequences, the impact of which can come many years down the line.

Richard’s idea, to abolish tax incentives for private pensions and use the £41bn “savings” to reinforce state pensions might work in a command economy, but it would not work here.

Richard (Moneytrainers) will get a reading at the WPC, but to get a hearing is something else. Those who get to talk to the Committee have generally done something useful.

The transparency agenda

Andy Agethangelou has made himself the voice of “pensions transparency”, if such a phrase could be patented , he would own the patent. I remember drinking with him in the Red Lion (opposite Downing Street) after the first of his breakthrough meetings in the Houses of Parliament.

We saw Frank Field making his way across Whitehall and clobbered him with the whole nine yards. Bemused by this verbal ambush, Field headed towards #10 (this was the time when he was demanding action on the treatment of workers in the gig economy).

The transparency agenda has now emerged in the form of the questions asked by he Work and Pensions Select Committee. Our response is here, I am seeing many of those Andy has assembled around him -responding too.  Andy and his troops have become the usual suspects, respect to Andy.

Transparency in action

It takes more than talk of reform, it takes forming the agenda.

It take more than an agenda, it takes action.

So far, action has been short in supply. The Independent Governance Committees are finding their feet but have yet to prove themselves the policyholder’s champions.

Most occupational DC trustees are limp as last-week’s lettuce.

Pensions remain in the bubble. There is no pension aisle in the MoneySupermarket, there is no “compare the pensions market”.

Ordinary consumers remain bereft of practical help on what to do with their legacy pensions and with the DWP dithering over the Pensions Dashboard, the chances of meaningful improvement this decade look increasingly bleak.

Practical help to those outside the pension bubble, the 94% of us who don’t want or have access to proper financial advice is confined to the columns of national newspapers. Even there, the level of expertise and conviction is limited and the majority of comment is from people within the “pension industry”.

I hate the word “outreach”, but it is what is needed. If Frank Field and the WPC can create a national debate on what we do with the £400bn of “legacy non-workplace” pensions then he will have done much good.

I hate the word “legacy” as much as “outreach”! Last week Now Pensions started talking about the mistakes it made between 2010 and 2015 as “historic issues.

We are pleased with the huge progress made and believe that we’ve taken, and continue to take, all reasonable steps to comply with the notices and to put these historic issues behind us  – Nigel Waterson (Now trustee chair)

As Alan Chaplin rightly pointed out, at that rate you could call yesterday “legacy”.

The money that was invested in the 70’s, 80,s and 90’s is not “legacy money”, it is the money that people in their fifties and sixties are relying on to fund their later years, meet the nursing bills, pay for the holidays and its money for the kids and the grandkids too.

One of the aims of any transparency campaign must be to make “legacy” a thing of the past”

Shining a light on our “long-invested money”.

If organisations like NOW was to regard the money invested in its early days as “long-invested” money, then it might realise that it is its most important money.

The reputation of NOW and all the long-term pension providers, whether operating trust or contract based schemes, depends on how they treat their long-term investors. If they consider them “legacy” or “historic” problems, then they don’t understand the nature of the game they are in. They are in the game of long-term investment.

The DWP talk of there being 50m “abandoned” pension pots by 2050, the word is spot on. If we do not shine a light on our long-invested money, that money will be abandoned, set to swell the bank balances of advisers, we’ve long forgotten, of pension providers whose names we’ve forgotten.

The business of tracking down this money, investigating it and making sure we get the most out of it, is the biggest task on my agenda today. I am setting up AgeWage with a view to mapping the pension genome to help people do just this. agewage vfm

It would help to have my dashboard and the technology to get the data, it would help to have some money  and it would help to have the permissions from the regulators. All three are on the way – this work will be done!

Helping people to find out what they have in terms of “long-invested money” and giving them the help to make the most of it, is the business of AgeWage.

I applaud Andy Agethangelou for constructing the agenda, I cannot support Richard Smith for his well intentioned but misguided efforts. Those who look to the future without trying to understand the past miss what Balzac called “the secret source of human genius”.

I look forward to the next ten years when we “put pensions to rights”.

That means making “legacy” a thing of the past. Every penny is a penny for the future!





About henry tapper

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