Thumbs up for PLSA’s Retirement Living Standards

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It’s a shame that the timing of the PLSA’s big reveal coincided with the announcement of the  Brexit agreement. It hasn’t got much airplay and frankly- even the PLSA annual conference seemed a little underwhelmed.

The PLSA have launched a lot of initiatives over the years, few have worked.

I’m going to stick my neck out and say that the retirement living wages produced by the PLSA research team in conjunction with Loughborough University are useful and should be adopted by everyone in pensions.

This one works for me – but see for yourself.

So what’s it all about?

The PLSA has identified a problem, the average person has nothing to target as a retirement income ( Agewage).

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Plucking numbers out of thin air, which is what has happened up to now, is no way to get consensus on what is needed. What’s needed is a solid -evidenced based – set of numbers that we can all get behind.

What the PLSA have done is solve this problem by teaming up with the people who set the National Living Wage and repeat the research that got us where we are with that. The numbers are based on research on what ordinary people think they need as a minimum to get by, to be moderately well off and to be comfortable – in later life.

You can see the gentlemen behind this if you click on the picture above ,  he’s lurking below the screen.  He and his colleagues did a good job explaining to us how the detail worked. I probed about why the shopping basket for basic and moderate lifestyles came from Tesco and why – for the comfortable, the cost of goods was measured by a shop at Sainsburys.

The research shows that the super discounters – Aldi and Lidl – are not suffeciently available to form part of our national shopping cost benchmark. Similar questions solicited similar answers when assessing the types of booze and food we bought.

The thinking behind these three categories of lifestyle is carefully articulated using words that occurred in conversations with the ordinary people who participated in the research.

I was very taken with the kinds of leisure activities people said they wanted to engage in , in later life

You can read for yourselves the detailed analysis by going to the website created for geeks like me , for whom this research matters, it’s a surprisingly interesting place to nose about in! Here’s the link.

And it wasn’t just me who was impressed by this concrete research

Immediately the simplicity of the approach sparked questions..

One of my (ha ha) fellow journalists, Rebecca Jones, asked sensible questions about the exclusion of housing costs from the retirement living standards. The assumption that these would be reduced by the end of mortgage or the availability of housing benefits , doesn’t quite work for me. Most elderly people I know complain about the cost of maintenance of the properties they own or the need to meet the rent because they don’t want to or can’t claim benefits.

So I can see the numbers sparking debate and engagement just as any simplified and universal benchmarks will do. These living standards need to be personalised but they act as a starting point and we heard later in the day that Aviva and others are already integrating these numbers into their planning.

I will certainly be looking to do the same for customers interested in creating a retirement plan , trying to work out what they want as a wage in later age.

You can judge for yourself whether the marketing collateral created to get the message out works. I hate it and am absolutely sick of these animations, but judge for yourselves! You might want to feedback on this blog as the comments box is turned off on YouTube

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in advice gap, age wage, pensions and tagged , , , , . Bookmark the permalink.

2 Responses to Thumbs up for PLSA’s Retirement Living Standards

  1. John Mather says:

    Henry
    What on earth is the use of these animations? No call for action
    Perhaps they should say what an annuity would cost to buy these modest pensions Perhaps account for RPI on future income for a 30 years in retirement ending with £100,000 of care costs for 1:4

    Then see how much the contribution is required to achieve this and then work out how to deal with the requirement left over after using up the lifetime allowance

    No wonder so many people have Oreo pensions outcomes if this is the replacement offered for a real qualified adviser

    Who funds this organisation?

  2. Peter Tompkins says:

    Interesting approach. At least it is trying to build up the target scientifically.

    These thoughts need to happen in our 20s and 30s to give us the kind of goal we ought to set. But then at the other end people really need help to work out what they’ve got and then to trim or expand their budgets accordingly. For some that will mean skimping – letting a car run a couple of years longer or putting off some redecorating. For others it will mean giving a helping hand to the kids or grandkids. I think the AgeWage need is more to help set budgetary expectations with what you have got. But there is always the need for the Avivas of this world to sell the proper informed early planning.

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