Really?
Scottish Widows has researched into the UK public’s capacity to pay the bills in later years and has concluded that workplace pensions are key to meeting the shortfall between what people get from the state and what they need to pay household bills. Professional Pensions reports that
Scottish Widows head of pensions policy Pete Glancy said: “Our research couldn’t be more timely, spelling out just how crucial targeted measures are in preventing millions from living in retirement poverty in the coming years. The second phase of the government’s Pensions Review must be broad enough to take a holistic view on people’s financial journey through life considering wide-ranging financial goals. There are three key areas that must be addressed urgently: auto-enrolment, self-employed contribution rates and housing, considering both home ownership and affordable housing.
“For now, the challenge is helping people make the most of what they have. It is essential to ensure people feel financially empowered to make informed decisions and take proactive steps for their future – with a strong sense of financial independence playing a key role.”
Below are the key faces of Scottish Widows’ saving
- Reynolds- SWMT
- Glancy
- Warwick-Thompson
These are the two messages that we hear again and again from the insurance sector;
- The amount paid into DC schemes should rise
- That people should make informed decisions and take proactive steps for the future.
Somewhere in the messaging is an improvement in “decumulation options” but beyond annuities and drawdown, the choices don’t appear to be developing.
This morning TLT will launch its proposals to run CDC, it is a sensible strategy for a DC strategist that is looking to have a credible future and I look forward to reading about what they feel the market can do to offer more for what we have. The value for money from CDC and shared ambition schemes such as proposed by PSH and Nest needs to be tested against the insurance solutions. I expect to see the ways people can spend their pots developed fast.
In the meantime, demands on savers to save more through the 2017 AE proposals seem stuck in the ABI’s throat. The Pension Minister says it will be considered in a future Bill or maybe just more consultation (we have thankfully few consolations since Bell’s arrival).
Scottish Widows are owned by Lloyds Bank who bought out the Zurich working savings proposition to provide an alternative to Scottish Widows workplace GPPs. They have been miserable failures and are now looking unlikely to survive the consolidation culls coming the workplace pension’s future. It is a sad failure for a venture that I was involved with at Eagle Star and Zurich 20 years ago.
The reality for operations such as Zurich and now Scottish Widows is that they do not have an ear to the needs of the key stakeholders in delivering adequacy. People are simply not making informed decisions to pay more into workplace pensions. They are more likely to invest in the state pension or keep savings in the bank than make investments in propositions they do not understand.
It really is important that Scottish Widows and other master trusts consider their futures as a means to help people improve their retirement income rather than a tax on workplace savings.
I wish Scottish Widows new Chair of Trustees, Jonathan Reynolds well and wish former COT Andrew Warwick-Thompson a swift return to health
Jonathan Reynolds, Widows new COT
