The corporation of London are surprised that City employers aren’t as satisfied with pensions as they are!
The intent is to do the right thing for their staff but if the “Global City’s” employees don’t get pensions, what hope is there for everybody else.
I have spoken to a few investment banks, asset managers and brokers of various kinds. The general feeling is that staff are well catered for by a well funded DC workplace pension. Many of them deliver services not just to their staff but to many other employer’s staff.
The gap between the employer’s view and that of their staff does not come as a surprise to me at all. Typically I will hear statements from staff along the lines
“I know I’m in my company’s pension scheme, it’s just I don’t know what to do”.
I feel that way myself, faced with a pot of money that could plummet in value if investments in the magnificent 7 (or perhaps 8 now? ) go wrong. It’s not just that I’m invested in things I don’t understand, it’s that I have very little invested in the UK and nothing that I know of that’s stimulating UK productivity and growth.
As for my contributions. I’m faced with the nastiest , hardest problem in finance. If proof of that is needed, almost everyone I know (including myself) don’t know how to set my pension up so that it doesn’t run out on me as I get old and that it does keep up with inflation as the state pension does.
The answer from the City of London is “financial wellbeing” which is not as woolly as you’d think.
Closing this gap is essential to delivering the UK’s broader growth agenda. Initiatives such as the Mansion House Accord demonstrate the scale of opportunity, unlocking significant long-term investment into UK businesses, infrastructure and high-growth sectors. But realising this potential depends on a workforce that is engaged, financially capable, and supported to make informed long-term decisions.
To improve workplace financial wellbeing this new report, produced in collaboration with nudge, is calling on employers to prioritise more personalised, life-stage financial well-being support that centres on education and is built around real-world scenarios. Roundtables conducted as part of the research showed that employees felt that current support was often too generic.
The report also calls on government and regulators to clarify guidance vs regulated advice boundaries; expand trusted financial education support into the workplace; and support consistent employer standards.
I agree with all of this and the essential point that employees don’t know what wage in retirement they will be getting. Everything comes back to two simple numbers, what is the tax-free cash and what the pension I will get when I need my pension?
Can we please stop assuming that people working in the City of London “get pensions“? Financial well-being is what you get when you know you will be alright when you want to stop working or when you have to stop working through ill-health. The questions that matter are about life and death and what happens for my spouse or partner.
It is about knowing that your pensions are paid from a well invested fund or from the Government. Investment is secondary to an individual to the outcome but I can see a higher level of engagement if you work in the City of London! But even so , I suspect that financial wellbeing comes with a sense of good governance from the people due to pay our pensions.
Financial wellbeing doesn’t need generic education. It needs reassurance that the deferred pay from “pension” deductions from pay, will offer a wage to live on – in retirement.