My generation is reaching the end of pension politics. Mark Rowlands was my Friends Provident broker consultant when I was at Gissings in the early 1990s. He’s hanging up his clogs for the final time shortly having eked out his days there. Phil Brown looks like he is taking his place having moved from People’s. These senior research people are of an age, DEI is not here yet!
Phil Brown made his amenable way onto the WebView of VFM , a pension podcast which the pension industry can rightly call a snapshot of itself.
Like his two presenters, Phil Brown had been a part of the People’s Pension set up, this was something of an alumni’s session but I would not you spend one and a half hours listening to tales of past mastery or of Arsenal’s 3-0 demolition of Real Madrid (the podcast’s team).
What is interesting is that Phil Brown is not sounding very much like his hosts in talking about CDC -now that he is at Nest. Indeed the idea that Nest members choose their retirement investment pathway is not one that Brown seems to entertain. This is based on history, Since 2010 Nest has just over 1% of its membership making choices about anything and 99% of us getting what we are giving.
We have heard recently from Nest’s COO, Paul Todd that the 13m savers without pension are likely to get pension (albeit without guarantees on the way they increase). You may ask how this might work and we will I expect find out a little when the DWP and Torsten Bell roll out the pensions Bill.
It is unlikely to happen immediately. Pensions are being restraightened by Royal Mail, the DWP and quite a few actuaries and lawyers. If you are a Royal Mail Corporate Pension saver you are building up a pension which will paid to you depending on how things go with the collective fund.
To remind readers of what Paul Todd told the IFS. the amount of increases in Nest pensions will depend on how much money the fund makes.
So lets put things together. Nest (and People’s) are now carrying a lot of money for ordinary people, they are not interesting “choosing” what to do – as they have shown by accepting the “default”. Nest expects that though they’ll be issued to option to do what they want (pension freedoms), most of its 13m (perhaps 98/9%) will do as they’re told and get a pension.
I hope that when I’m in my 70s (not 60s) then the news from Nest (and other “pension” companies) will be about the increase on the Nest pension each year, I hope the news but the news will be for all Nest savers getting pensions.
We put our trust in a lot of things to go well. Most of all we put our trust in our economy but down the line we hope our sector and employer and individual – do well. We know there is a chance they won’t.
Take as an analogy football teams. A few years ago Scunthorpe were a good team (took our striker) but now are struggling (though the steel working fans outside the ground were none the worse for that on Saturday). Yeovil v Oldham which was played on Saturday could have been the championship 10 years ago, today it’s the national conference.
What the presenters of VFM and their guests should remember is that the danger of supporting a small football club is that of these clubs who fall out of the league. My clubs as a kid included Bournemouth and Brentford because my dad lived there (his Dad was a Methodist Minister) . We could see them back where they came from by the end of the decade.
One thing we can be sure of is that Arsenal like Nest and People’s pension will be a huge club in ten year time and fifty years and a hundred years – so long as we still have Britain. I admire the presenters for choosing not to support Yeovil (one grew up in Bruton) or Tonbridge (the other). Life is a lot better supporting Arenal (or even Tottenham) and it’s a lot better working or saving with Nest and People’s.
When it comes to loyalties, we should stick with the big teams to support and the big pensions to be a part of .
All the same, listening to the chronic smugness that is a feature of this ever so long running and long- playing podcast, I do wish that they got real. Most of us won’t be able to support Arsenal other than on the TV and Radio and we will need less satisfactory ways to benefit from Declan Rice’s freekicks. ,Most of us will not have IFA managed or self-managed pensions, we will need the TV/radio version provided by Nest and People’s and the like and it is the job of blogs like this and pods like VFM to make sure that ordinary people’s pensions go down very little and up very much.
Because I recognise winners I am pro-consolidation and pro collective approaches to the provision of pensions.
But we still need fans at Yeovil and Tonbridge and Oldham and you don’t get the joy of a 1-0 home win if you aren’t a Yeovil fan!