A number of people have asked about “AgeWage”, so I thought to write an article introducing it and why I and our management team are so excited about what it will do.
A good business plan should start with a problem, the problem we have with pensions is that pensions is a problem – where do you start?
Why do people’s eyes glaze over when you ask them about their retirement planning? The answer is always “because pensions are so darned complicated”. Well they’re not, a pension is a wage in retirement – it’s an age-wage. We set out to keep pensions that simple!
How are we going to spend our retirement savings?
We’re all told to save for retirement, but what are we going to do with those savings? We spend a lifetime saving but no-one gives us much help in spending! AgeWage will help people who have savings – to organise their money so that it’s easy to spend.
There are three problems that we have when we start thinking of winding down
- What we’ve got
- What it’s worth
- How to turn capital into a wage for life.
Finding our pensions is a job in itself, hopefully the pension dashboard will help but for now it’s a hard slog. We have to log on through the Government gateway to see our rights to a state pension and collect an armful of paperwork from our workplace and private pensions. We need a pension-finder service.
The next job is to work out what these pensions are worth and how to organise our finances around them. For most of us, the idea of managing several small pots to provide a wage in retirement sounds too difficult. We’ll naturally want to bring our pots into one. But which one?
There are two ways of looking at this very tricky decision. We can look at what has happened in the past and go with the pension provider who’s given us the best deal in the past. Or we can look at what’s available going forward and move our money into what we think is the best deal going forward. We might go for a half-way house and use one of our existing pension providers going forward.
But how do we choose which one?
Where AgeWage comes in!
Bearing in mind how many of us reach 55 each year (over half a million) and how many pots we have (50m abandoned pots by 2050 according to the DWP), it’s surprising that more attention isn’t being paid to this problem.
Only 1 in 10 of us has taken financial advice and with adviser numbers falling , there’s not enough financial advice to go round. It’s not just capacity that’s the problem. Unless you’ve got £250,000 of investable wealth, most advisers won’t want to take you on.
So where do you go for help in working out what’s happened in the past and what you should do in the future.
The answer’s AgeWage.
What AgeWage does (if you ask it to) is look at the data your provider has on your pension and work out if you’ve had value for money from your contributions. We’ll be able to give you accurate answers to questions like
- How much more will I get out than I put in?
- What rate of return have I had on my contributions?
- What have I paid for pension management?
- What have I got by way of value for money?
Most importantly we’ll be able to answer all of these questions using numbers, not lots of numbers, but single numbers which aren’t based on guesses but on fact.We
While what happens in the future is a matter of fact, what happens in the future is a matter of speculation.
While we can milk the data from the past to see whether the value and costs of investment work when you’re spending your money, there are other factors that enter into the equation. We expect our money paid to us at the swipe of our phone and you won’t get that kind of service from most pension providers. We want information on how much we can spend and when our money’s going to run out. We want help in planning for events we’re worried about, like losing our marbles. Most of all we want to keep things simple.
If you want to know more about AgeWage – drop me a line at firstname.lastname@example.org . I’ll be happy to help!