“For professional use only. Capital at risk”

Here is a conversation about good retirement from DC workplace saving. But it’s not far enough for me and millions like me who don’t want a course in good savings behaviour!

I’m not professional and don’t like my “capital at risk” . I’m dependent on it to pay me for the next 30 years!

L&G have the answer in its DC savings product but people are failing themselves and need help to take better decisions. L&G have invested in encouraging people to get the retirement income that “they need”.

The message to people like me is clear, this is what i hear…

“This is not DIY because L&G are there supporting you into retirement”.

This message comes from a conversation between Jenny Hazan and Lesley Ann-Morgan that you can watch on this link.

There’s also a transcript of the conversation here, I think it the most cogent defence of DC as a means to help people save, However it is not an argument for pensions, it’s an argument for people to rely on L&G not just as their provider but as a financial coach and GP (if a medical term can be applied to financial failings).

I have taken this exchange towards the end of the conversation with Jenny Hazan concluding

What excites me most is seeing evidence that our approach is working.

One area I’m particularly proud of is our guided digital retirement planning journeys, launched in November 2024. They adapt based on what we know about members and what they tell us, break planning into simple steps, and take a more holistic view of finances.

We’ve seen 50% fewer members using the journey facing a retirement shortfall. One in three completes a full plan, and one in five takes a significant action — like consolidating pensions, adjusting contributions, or changing retirement age.
Those behaviours really matter, and we’re now seeing strong engagement from younger audiences too.

But there are value judgements here that don’t surprise. I am an L&G saver, have consolidated my plans into my DC “pot” and have deferred taking my pot till later in my life than I would have expected for my career (I’m 64) but I still don’t know what pension I can draw, what I have bought with all my savings over the years, I am totally in the hands of L&G whose values I happen to agree with. I made my mind up to have one pot, retire when I needed to and save as much as I can afford. My values just happen to be the providers, just happen to be everybody’s ideals. How L&G improve people’s behaviours is by selling them what we already know, but just don’t do.

But here we have something new, explained by the big boss, Lesley-Ann Morgan (who I’ve met and who is consummate business woman. These are her parting words

Jenny, thank you so much for joining me. That’s been a fabulous conversation and a powerful place to end.

My takeaway is that DC doesn’t have to be a DIY system. When it’s designed well, it can guide people, build confidence, and help them take action long before decisions become urgent.

That’s what DC Close Up is all about — focusing on what really matters and sharing practical examples of how the industry, and how we at L&G, are evolving to support better decisions and better retirements.

I would dispute that what L&G is taking away the DIY, what they are doing is what I started out 42 years ago and that’s encouraging people to do what keeps them saving with L&G and presumably spending their pots with L&G.

Whether that’s in the interests of people like me is not in question, it is the only alternative under discussion.

Here is L&G explaining that left to our own devices , a large number of us will fail but signing up to the L&G support , means we change our behaviour for the better and will have less chance of  being  poor in retirement. This is the adequacy question introduced at the start of the conversation.

I am not surprised that DC saving is being sold this way, it is the best that DC can do, but to suppose that DC need not be DIY is pushing the argument. Actually we DC savers are still taking all the risks , even if L&G’s savings product does a good job of delivering us a pot of money.

L&G are cutting down the number of bad decisions we make but we are still doing it all ourselves. That compares with DB, as Lesley-Ann says; DB is the place where decisions are made by other people and you plan around the promises you get. That to my mind suits most people who “don’t get out of bed and check their pot value”.

Here is where CDC provides an alternative. Rather than teaching us how to take risks , it pools the risks so that we all support each other. For many people, myself included, there is an advantage of sharing risks and it’s because I do not want to be proud to be the “one in three who completes the plan” (see Jenny above).

I think we can do better and have done since starting to think collectively (15 years ago). There will be a portion of savers for whom DC saving (and drawdown saving) will suit but for the majority of us, taking the risks of failing later on, is not going to be solved by being taught how to behave. We need to have the pension done for us.

Thanks for this conversation, L&G probably take us as far as DC support can. But it’s just not far enough for most of us! I don’t want a course in behaviour , I want a pension!