People are confused by pension pots
pot
Richard has followed MoneyFarm to that conclusion.
Most people understand savings and pensions to be different. Most of us think of pensions not as pots but as pensions that pay us a retirement income for the rest of our life. We aren’t worried about the mechanics . we do worry about the capacity of pensions to keep us paid for as long as we need to be.
Daniela Silcock points out that we have not made it clear why we have pensions – why even a state pension
She has been reading an article I commented on earlier this week..
The FT notes that across the EU, 47% of all social protection spending now goes on old age and survivors’ benefits. That figure is often used to imply excess. On its own, it tells us very little. High spending may reflect demographic change, policy choice, or success in reducing poverty. Without clarity on purpose, the number becomes a talking point rather than evidence.
The same lack of clarity sits underneath debates about the state pension age and the triple lock. These are not technical adjustments. They determine when the state steps in and how much support people receive. Those decisions only make sense once the role of the state pension is defined.
The problem is that the government has not said clearly what the state pension is for, in the world we now live in. Until that question is answered, arguments about cost, pension age, and uprating will remain stuck, and policy will continue to drift by default rather than by design.
The problem is there are so many different answers, each depending who you represent. There are those in policy who grapple with the philosophy of pensions, Daniela is one.
There are those who are a step down, Richard Smith is key, thinking as he does as at a practical level about what people will get.
Finally, there are those in private markets who make their livings out of our savings. These include Moneyfarm and those who make the ABI, Pensions UK and who are regulated by PRA, FCA and TPR (so that they leave enough in the pot for the system to work).
But all these tiers of thinkers and actors in the management of pensions now want it for ordinary people to know what is going on in their finances so that they take responsibility for their later lives.
I am sorry to convey my experiences in recent weeks, but they have happened in hospitals as well as boardrooms and I have been with people bewildered by growing old as well as brilliant thinkers knowing how money works.
What I am sure of , is that patients will not become doctors, savers will not become actuaries and that responsibility for our health as well as our wealth is in the hands of others.
