Josephine Cumbo

Jo Cumbo is Britain’s foremost pension journalist and respected not just as a news hound but as a serious commentator. As an Australian, a mother and someone 20 years my junior, she represents an independent type of thinking that provides insights from looking at things in a different way.

Jo’s perspective through this current crisis is important in itself, but her capacity to listen to others and assimilate differing points of view into a central thesis, makes her authoritative. She is unflattered by praise and fierce when crossed.

Jo has put out a call for views on what the current lockdown will lead to – this is the message

I am gathering thoughts on the big issues facing pensions from the Covid-19 crisis, whether that be mass unemployment; tech change or the switch to Working From Home. How will these trends impact saving and retirement ambitions for the young and old? Email josephine.cumbo@ft.com

— Josephine Cumbo (@JosephineCumbo) May 5, 2020

Jo may not be a one woman pension commission, but she could be the maven to a Government body set up to manage our ambitions about life in retirement. Since I started talking with Jo about this, I’ve seen a couple of friends sending in contributions. Each one is worth space on these pages, but collated, edited and properly organised by Jo, I am sure together we could recreate the dynamism that made our last pension commission – 16 years ago – a success. I have opposed pension commissions in recent years as talking shops, but the urgency of the current situation demands a congregation of minds and Jo Cumbo.

Not for everyone. Social inequalities in pension provision mirror these during working life. Reasonable to think we are soon to see substantial increases.

— Debora Price (@GerontologyUK) May 5, 2020

… and overall financial management. Retirement savings cannot be looked at independently from other elements of someone’s wealth, debt, earnings and protection. The technology exists to help people in work & otherwise efficiently & holistically optimise their financial health.

— Marc Hommel (@marc_hommel) May 5, 2020

I think we will continue to see increasing proportion of workforce become ‘contractors’ or ‘gig workers’ or ‘non-permanent’ (whichever label you want to apply) – despite the IR35 debacle. And employers increasingly demand and rely upon a ‘non-permanent’ workforce. Thus we ….

— Marc Hommel (@marc_hommel) May 5, 2020

Big issues for many are:
1. reliance of pensions on the stock market with looming post-Covid-19 recession
2. Indebted governments post-Covid-19 cutting state pensions and tax incentives for saving in private pensions

— 𝙶𝚛𝚊𝚑𝚊𝚖𝙴𝚕𝚐𝚒𝚗 ☕️🎸💻⚽️🐋 (@GrahamElgin) May 5, 2020

I’ve put my views , written over yesterday’s lunch and published as I sent them. If you are interested to send her yours, then she can be contacted at Josephine.cumbo@ft.com. Jo’s particularly interested in views by close of play today (May 6th).

Technology is the key to recovering some of the ground we’ve lost to COVID-19

Our biggest issue in the short term is mass unemployment especially where technology cannot replicate – physical labour. So technology could initially make things worse (in terms of employment).

But technology make things better in terms of productivity. Not since the purge on manufacturing in the late 70s onwards have we seen such a threat to traditional labour. This is a real threat to chunks of the workforce who had seemed inviolable. Large amounts of local and central government, transport, hospitality and office services seem replaceable, if the concept of home-working embeds itself.

Technology could keep Britain on its feet by improving productivity, in the long term technology will create jobs -if we can adapt, but as in the late 70s, this change looks very daunting. Perhaps the most interesting aspect for pensions is not the impact of technology on obvious things like comms and admin but the changes the pandemic could make in social organisation.

Will we see a surge towards collectives – as the “we’re all in this together” spirit reasserts itself, or will personal freedoms come to the fore and we see an every man for himself approach? I see the traditional forces of collectivisation – employers – as receding into “facilitation” with payroll and a smaller contribution to pensions (both DB and DC).

But I see the new collectives, the master trusts and to an extent the insurers, playing a leading role in pensions organisation (this sounds a bit Australian). If I’m right, then the unions look a bit stranded right now, they need to find new friends at places like NEST , NOW , People’s and Smart who stand to gain in importance as employers pack pensions in (as a fiduciary force).

Will the master trusts fill the void left by DB and start offering “pensions” again – as opposed to “investment pathways”? Or will pension saving become a feeder for the wealth management industry, with people’s retirement accounts becoming their main source of later life liquidity? This is a big unanswerable! We will have to wait and see how brave some of these providers are.

Consultation makes cowards of us all

Right now, I see the DWP kicking cans down the road (TPR DB funding consultation, pensions dashboard and taking on the FCA over transfers).Let’s hope that some of the tools – CDC – tPR powers, dashboard legislation – are unlocked soon and we get the Schemes Bill through.

I hope that what will come out of COVID-19 will be a much more demanding public who won’t stand for poor value for money and will put their foot down to get the information they need to make proper decisions as they start retiring. I think the state will have to keep the big safety nets – PPF ,Pension and Universal credits and State Pension in place. But they’ll become intolerably expensive – so I can’t see the triple lock lasting if inflation kicks off and I can’t see people accepting a PPF haircut without an option to transfer out.

I’d like the DWP to start thinking of lighter solutions – such as a CDC section for the PPF and a CDC option for DB schemes that otherwise would dump and run (I mean pension pre-packing).

If this means an orderly move away from guarantees, so be it. One of the questions- as your note puts it – is to find a way to “afford what we need”. Guaranteeing pensions may be what we want – but like so much else – is it what we need?

Henry  AgeWage

The new pension commission starts here

— Henry Tapper (@henryhtapper) May 5, 2020