We spent the first half of the year hearing the pension reformers of Pensions UK complaining about mandation of investments to improve domestic growth. The second half of the year looks like a return to a call to mandation of more employer and employee contributions into workplace pensions.

This will go down like a lead balloon at a Labour Conference that is heralding a “cost of living” budget. The big feature of the Prime Minister’s speech was an NHS style social care system that will benefit mostly the old. The talk of the commentators on the Labour Conference at Liverpool is how the country will pay for that free social care system. The talk is that we will swap future increases in pensions for better healthcare for the elderly.

The triple lock is one candidate for savings but that won’t be before 2030 so for the time being the “cost of living” story will not include a demand that more of our wages are deflected into saving pots. It is not a “cost of living” measure, it does not help us pay for free social healthcare for those in later life. It is at the very back of the politicians queue.

What’s Pensions UK argument for change?

Pensions UK has conducted two surveys both employees and of 251 small and medium sized employers

Pensions UK noted support for AE increases was strong among small and medium-sized employers, with opposition being concentrated among micro-employers (with between one and nine employees).

It found that three quarters of these companies would pay more if they were given time to prepare for it. As an employer of two such workforces , I take it that means we get time to adjust salaries to meet the new obligations to increase employer contributions, these will be coming out of increases if they come.

People are skint and more austerity may sound good among employers so long as there’s a reward strategy that give them time to explain to staff and their representative. For the very small “micro” employers, there is no wriggle room , they are not for more mandation of employer contributions as they don’t know how to sidestep its cost to the P/L.

Not surprisingly, most employees want more money going into their pension pot.

The survey of 1,623 working-age adults – conducted on behalf of Pensions UK by Yonder Consulting in July – found more than four-fifths (82%) of respondents said under-saving for retirement is a key issue in the UK. Furthermore, nearly three-fifths (57%) said they did not have confidence they are saving enough in their pension to maintain their current living standards once they retire.

But most employees also expect their money to pay a pension. The Government is playing the value for money card and asking whether pension providers can do a little better with the money that’s rolling in to workplace pensions.

The survey did not explore whether these employees would swap paying more for a bigger pension in retirement. If you believe the large consultancies that predicted CDC could increase pensions paid to employees by over half, it is surprising to me that Pensions UK are giving as the choice for members an increase in mandation as the only option than remain under-pensioned.

Pensions UK also found when asked whether AE contribution levels should increase, decrease or remain the same – with just under three-quarters (74%) said they should change, with 31% said they should increase compared to just 3% who said AE contribution levels should fall.

We have seen no inclination to pay more into people’s pots by our influential pension minister. Instead, we hear a lot of talk about paying more pension from the current saving and from what’s been saved to date. Hopefully , within this parliament we will see pensions advertised on the pension dashboard as wages in retirement and not  pots of money.

With the arrival of dashboards will be the arrival of the first wave of CDC pension schemes paying pensions and not pots, Collective Pensions will be marketed by employers to employees as a pay rise in retirement and rightly so. No one disputes that they will pay more than annuities and more securely than a drawdown from a pot.

What are Pensions UK doing?

We had a previous Government back in 2017 promising we’d be paying more into workplace pensions by mandation by now. Not only has it not happened but there’s no sign of it going to happen from a “cost of living” Government , committed to getting us a free healthcare for social care.

The way this Government has gone is to move towards Guided Retirement Income for Life for pension pots and pensions not pots for CDC. This seems to me the alternative to mandating further increases to auto-enrolment saving.

Employers want higher contributions, there is nothing that is stopping them. Employees want to pay more, there is nothing stopping them. If they knew what they were getting out, they might want to adjust the amount going in but right now the SMPI illustration is not doing the job.

Let’s get back to a system where our saving is buying pensions and not a pot of money. That’s what will make “pensions” a lot more real for ordinary people. Mandation of increased savings is no better than the mandation of domestic investment. We need to want to do it, we need pensions and not pots.