The wellbeing of the elderly is all of our business.

Ros Altmann is right.

Both Ros and Steve Webb are quoted in a weekend article in the FT , calling on Chancellor Rishi Sunak to review the decision to only uprate the state pension by 3.1% in April.

This is from Steve Webb

“The government needs to accept that a 3.1 per cent increase doesn’t even deliver its own stated objective of protecting pensioners against increased living costs and think again about the April increase”.

“Energy costs in particular form a larger part of the budgets of older people and they will find it extremely difficult to absorb these costs without cutting back on heating or other vital expenditure.”

The Government clings to its existing measures, hoping to increase take up of Pension Credit and rely on the energy price cap, winter fuel payments and a £500m household support fund which would help low income households through the winter.

But the Government’s position on protecting the consumer is weak. Chris Flood’s article in the FT makes it clear that the current energy crisis was avoidable had the problems of the energy industry been addressed over the past twenty years. Flood’s conclusion is damning.

Ofgem’s failure to address this lack of resilience in the industry it regulates is identical to financial services regulatory failure before 2008-09. That it has happened so soon after the financial crisis should be a national scandal. Had ministers acted on the market reviews they commissioned, such as Sir Dieter Helm’s 2017 cost of energy review, many of these problems could have been avoided. But his report, like so many others, was shelved.

It is within the Government’s capacity to protect pensioners who are most vulnerable to this failure. The moral case for Rishi Sunak to review his decision is founded on this.

How should the pension community react?

We are in the business of helping people fund adequate retirements for those in later age. For the past sixty years, a sizeable proportion of our population did not participate in the pensions we have managed. this is graphically depicted by the charts below.

Source LCP (Steve Webb to PMI December 2nd); based on ONS data.

The UK pensions industry provides less than one pound in five of income paid to pensioners. The remainder comes from investments , earnings and dwarfing all else- the state pension.

Those great grey edges in the pie-charts tell us how dependent the nation is on the state pension and its top-up, the pension credit.

If we regard ourselves as pension professionals, our duty is to call for pensioners to be protected, whether they are in the schemes we manage or not.

It should not be left to Steve Webb, Ros Altmann, Age UK and other charities and NGOs to argue against pensioner poverty.

The insurers , asset managers, financial advisers, benefit consultants, lawyers, accountants, custodians and trustees that  constitute our industry, should consider their positions.

Are we an industry that serves the wealthy or the wider constituency of pensioners?

I do not suppose that individual organizations will lobby the Treasury and DWP for the payment of a better increase in April. But I do think this is what our professional bodies should be doing. The ABI, PLSA, PMI and IA do not represent pensioners, but the commercial organizations they represent serve the orange and pink segments of the pie charts  from which these organizations generate their profits.

We cannot have a Pensions and Lifetime Savings Organization that does not put the interests of pensioners first and foremost. We cannot have the Association of British Insurers, not concerned with the physical and mental wellbeing of the elderly. If we wish to profit from pensions, we must consider the interests of pensioners.

Our individual duty of care

For those of us who do not have “policy” written into our job descriptions, the issue is still important. It behooves us to be concerned for current pensioners, even if our customers are affluent.

If our focus does not include the outcomes of what we are doing, why do we call ourselves professionals?


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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3 Responses to The wellbeing of the elderly is all of our business.

  1. John Mather says:

    Have a look at this paper from 2017

    The U.K. productivity has been on a downward track for some time
    Austerity is painful,
    Higher taxes a vote looser
    QE and devalue seems to be the current track the U.K. is on

    Having separated from our major markets GDP growth seems to be a bigger challenge and a
    Shrinking pie is the opposite of what the U.K. needs to provide a better state pension for the majority who are one pay check away from insolvency

    The have/ have divide is destined to get even wider.

    Who would be a politician? The next regime will have to repair the situation they inherit

  2. Peter Tompkins says:

    A good challenge. The frightening thing about energy costs is that whereas price inflation normally creeps up on us, in this case we can see the huge numbers for the increases the formula will deliver in April right when the 3.1% increase comes through.

    But the answer should not necessarily be to lock in a specially large topup increase for everyone this year. As you know once added the State pension is then set on a higher trajectory. That will pointlessly deliver a bonus to people like you and me when we hit 66. Society needs to help our fellow citizens in need right now. The wider issue of how large and well-designed our state pensions ought to be would be better addressed as Ros has called for by a proper review commission.

  3. Richard Chilton says:

    We mustn’t forget that some of the worst poverty is amongst those of “working age”. The state underpin for them is Universal Credit, the basic level of which can be less than half the underpin of Pension Credit for those over state pension age.

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