The main thrust of any trade association is to maximise the profitability of the body of traders. It is necessary for the pension industry to grow its assets under management and this requires money going into the system. To do this in a way that’s acceptable to Government (who controls the flow of money into the pension pot) there needs to be a focus on the good the service does the country.

I’ve read the press release on the Pensions UK report to be released at its conference that starts to day. The press release is laid out for us to read in the trade press

Here it is in the Corporate Adviser

Improving pension adequacy was also also identified as an urgent concern in the report, with Pensions UK claiming that automatic enrolment has increased participation but not yet delivered sufficient retirement incomes for millions of savers, particularly younger workers, low earners, women, carers, part-time workers and the self-employed.

And then to make the point another way…

The report estimated that increasing automatic enrolment contributions to 12 per cent could provide a typical 18-year-old with an extra £96,000 in their pot by the time they retire, while broader coverage would improve outcomes for low and middle earners, women, part-time workers, multiple job holders and the self-employed.

There needs to be some consistency. What is being asked for is on the one hand”sufficient retirement incomes for millions of people” and on the other an  “extra £96,000” in the 18 year old’s eventual pot.

I’ve written elsewhere this morning that markets do not work if they have no clarity about what they offer.

If I was in the DWP and presenting a synopsis to the Pensions Minister, I’d point out that what is being asked for is an increase of core revenue of 50% from 8% to 12% and for other increases including inclusion of those between 18 and 22 who are currently not auto-enrolled. The triple lock of their recommendation is delivered by including the lowest pay band which currently is not “pensioned” – eg hasn’t 8%  “taxed” for later payment by the pension. This is known as contributing from the first pound.

Much of the press release (the report will no doubt be launched today) is talking about things that will please Torsten Bell.

“Pension reforms are not only necessary; they are urgent. Better pensions can deliver a wider dividend through stronger household resilience, improved retirement incomes, larger pools of investment capital, stronger growth and reduced long-term pressure on the public finances.”

But this will be delivered better if the trade body’s revenue is increased by the triple whammy of increase revenue

It highlighted modelling by Oxford Economics on behalf of Royal London showing that higher pension saving can support stronger medium- to long-term growth by increasing the supply of capital available for investment. It also cited analysis suggesting that moving to 12 per cent contributions, applied from the first pound of earnings, would generate £17bn a year in additional pension contributions.

The cost of living won’t go down if pension payments go up by 50%

If you’re advising the Pensions Minister, could you make a case for increasing pension contribution by half again? You’d need to have clarity about the gain to the nation in terms of improved income in retirement.

Right now, this Government is considering how it can pay for the Social Care Framework that it wants a future Government to introduce. They are being very clear about the advantages of improving the affordability of Social Care, it will mean extra taxation or perhaps some kind of insurance as Steve Webb and LCP suggested yesterday.

The cost of pensions isn’t going down for the Exchequer any time soon, the triple lock is still improving pensions for everyone (including the young).

Here the aim of Government is clear and though the benefit of talking about something that will take at least a decade to get fully going – it has caught the public’s imagination.

To get the Government and the public’s enthusiasm for an increase in auto-enrolment (a tax by another name) , Pensions UK are going to need to be clear about what they mean by pensions and what the benefit in terms of income to future generations will be. It is not a good time to advertise a pot of £96,000 in 40 years time for an 18 year old or to call for more reform for older people who will be directly affected by the introduction of Guided Retirement and CDC before the end of this Government.

Right now , the Pensions UK should recognise we have a cost of living crisis

Our first problem as a country is that we have not seen the benefit of growth in the economy (it appears to be happening).

Instead we are seeing the problems with out healthcare (go to any hospital handling AE in corridors) and the bed blocking of old people who cannot be returned to social care.

Instead we are seeing problems with housing where people cannot find affordable places to live (other than with parents). Where those who have their own home cannot afford the various charges levelled upon them (higher mortgages being only the largest single one of many)

Advice to Pensions UK

Pensions UK should withdraw their demand for a 50% increase in revenues and think about whether they are selling pots or pensions to the people who elect politicians.