These are the big three things that people hate about “pensions”

1. They don’t have a pension , they have many pensions
2. They don’t just have many pensions , most  pensions turn out to be pots
3. The pots aren’t predictable, they go up and down without explanation

There are other things too, these pots and pensions get lost and there’s no good way to find them, the way experts talk about pensions is hard and jargon is obscure, the tax rules are complicated and scary.

Some of these things can be easily fixed with better explanation but the big three (above) are systemic and will only get sorted with the help of Government, which is why pension policy matters and why the pensions industry came in line.

Potplicity

I’m going to ignore , for the sake of this blog, (2) and (3). Fixing people’s pension entitlement at a reasonable rate is what my day job is right now, my day job is not about combining pots or even about giving people the single view of a dashboard. But I am absolutely sure that the pensions industry has a duty to the consumer to sort this potplicity problem out. “Potplicity” isn’t a word but I’ve added it to my dictionary – it means for the purposes of this blog, the proliferation of pots (as in multiplicity).

The Government has decided that now is the time to start the debate on this and I agree with it. The PMI does not

The PMI would like us to kick the pots down the road and deal with potplicity at some later point in time.

This may make sense to the pension industry but it will vex ordinary people, who are grumbling about too many pots , not enough pension and pots that don’t stay in shape but shrink and grow like a deficit on Horizon.

The Government’s current idea is what the Australians have already done. They call it stapling and it means that PAYE payments staple themselves to pre-existing pots using payroll to manage the process. That means that the pot you have today should be the pot you have when you want to spend it, without the encumbrance of other pots arriving along the way.

The average person has 11 jobs and – unless all the jobs use the same pension arrangement, that means up to 11 pots!

The popularity of Pension Bee and other firms that hoover up small pots, shows that there is demand from young and old for a pot consolidation process,

The Government has another idea to clean up the mess created by years of potplicity, It wants small pots to be combined by a cartel of pot-munching master trusts who will take it in turns to consume our little pots in return for our getting one big fat pot. The idea of a big fat pot may only mean a couple of thousand pounds but that’s better than four of five pots with less than £500 in each.

This idea is another good one but I suspect it will be treated by the pensions industry with a “nice try” dismissal, just as “pot for life” is being.

Agonising over the wrong things

While the pensions industry is busy telling the Government why it doesn’t want to do what the Government and the public want it to do, it is getting on with all kinds of things that no one really wants but makes us pension people feel good. To wit, the constant stream of reports about pension gaps between what people need and what they are getting. The answer to all this is “put in more money”.

More money in funded pensions is of course needed if we are to get a better standard of living in retirement and what you put in should come out bigger so long as what happens while the money is looked after by others , is looked after well. This is common sense and the public don’t need telling that they aren’t putting in enough money to retire as they’d like.

We agonise over tomorrow’s world but people over 5o are angry with us for letting potplicity be a thing today. Tomorrow is always a good day to think about today’s problems unless you are the people suffering them!

We agonise over the wrong things, pay gaps which can only be solved over time, and we procrastinate on today’s problems , to the frustration of those we have handed them to.

It really is time we set out a plan for dealing with potplicity and agreed to keep to it. We can’t go on kicking it down the road , potplicity causes damage