I’m going up to Edinburgh on Tuesday to the PLSA conference, my train ticket up cost £32, down £35 and I’m staying in student accommodation. Thanks to the PLSA for letting me cover the event from the press room, I am looking forward to listening to some interesting stuff.
As I prepare, I’m sorting in my head what are the real issues impacting the people we serve and what are the things that matter to us, but have little impact on people’s savings and pensions
When it comes to money, what matters is money in and out. Most people have not had wage rises that have kept up with outgoings, especially money spent on food , energy and housing (rent and mortgages). They are feeling poorer and some are struggling and , as Stacy Standen told a recent conference “I don’t think we have seen the worst of it yet”.
That we have not seen more opt-outs of pensions than we have is probably down to people’s huge insecurity about their later life finances. It is not down to rational trade offs between debt and saving. You cannot get the rate of return on your savings as you pay to banks on you credit account balances.
People are deeply insecure about later life and prioritise their pensions even when – rationally – they shouldn’t. We should be continuing to point out to people that they have options around pension contributions rather than add to insecurity
The money we have in savings, is ours, though sometimes you wouldn’t think it.
I spent an hour on the phone last week making an ISA withdrawal. Having gone through the process of identification and listened to the various warnings about valuations, I was told that I would be sent in the post a form to sign to confirm where I wanted the money sent. Three working days later, the form has not turned up and I am not expecting the process of taking a small amount of money out of an investment account to take over two weeks.
I have yet to access my pension pot but – even as an expert – I dread the thought of asking for my money back! Investment administration is critical. Quality of service matters and is an investment issue, if not for us – for our customers
We have to make it easier for people to access their money. We must also make it clear to people that pensions are for spending.
Making it easy for people to spend their pensions is crucial to whatever we mean by “engagement”, people are bombarded by offers to bring pensions together and to have wealth management, when most people want to own the process of spending money.
The PLSA bill the two days of discussions as an “investment conference” and most of the discussions on investment will be way beyond the ken of the people outside the conference building.
This is not a bad thing; we have given up on making everyone their own CIO, we act as fiduciaries to people’s investments and we need not foister the strategies we use on people who have no interest in the mechanics of investment
But we should be able to tell people, when they ask, how their savings are doing. It matters a lot to people how their money is growing. Especially when they take the risk of it not growing or even falling in value, they deserve accurate personal information on how their savings have done.
The Government’s Value for Money agenda is ultimately aimed at private individuals, though for the moment it is employers and trustees who will be impacted by it. Ordinary people are interested in getting value for money from financial services. If you don’t believe me look at Martin Lewis’ viewing figures.
Why this matters
Private pensions do matter to people , but they only form a part of the way they look at later life. What comes from the state pension, what comes from work , what comes from other strategies such as buy-to-let, ebay trading , car boot sales or buy to let, maters too.
Private pensions of whatever hue can matter to us more than they matter to the people who own them (see above). but the money that comes from pensions has the same purchasing power as the money from ISAs or from trading CDs at the boot.
People have been promised simplicity by way of a single view of their pensions on a dashboard ; they have been promised the freedom to spend their pension savings how they like and they have been given an expectation that by saving for a working lifetime they will be alright.
We know that it is more difficult than simply making assurances. But we must remember that the assurance of an income for life that gives dignity in retirement is our common purpose and our product.
It matters to me that this is what we do and it should matter to the PLSA conference too
It can be easy to get distracted by other matters, political, fiscal, macro and micro economic and lose sight of the very simple prize we aspire to – to be trusted with other people’s money