A time for resolutions

Martin Palmer, head of corporate pensions marketing for Friends Provident, hopes to see some better solutions for the pensions arena in 2010.

It would be all too easy to look back on 2009 as the year when things just got worse. I think we can all agree that the events of past twelve months have only eroded confidence in retirement saving and that (to date at least) there has been little done to increase the popularity of pensions.

Some think it’s the use of the word pension that’s at fault and although I am inclined to agree that probably hasn’t helped, I think we need to look further than the label and I am determined to finish my last blog for the year on a positive note!

Searching for the positive angle in pensions however is a bit like searching for the proverbial needle in a haystack. Certainly last week’s pre budget report and news that the Government is going to extend the phasing in period for the introduction of Personal Accounts by another year has certainly not helped and is another classic example of two government departments (DWP and the Treasury) pulling in different directions. After all the endless discussions about how to get more people into pensions we still can’t seem to find a solution. Instead we’ve witnessed an acceleration of DB closures and no corresponding mass take up of its DC replacement. The general consensus of people and government seems to be that work will extend out to age 70 in some form so the need for a resolution is all the more pressing.

But it’s this very issue of longevity that provides me with my first positive. The fact we are living longer, healthier lives and that one quarter of babies born in the UK this year are expected to live beyond their 100th year is surely a good thing? Especially when we compare this current stat with the fact the first means-tested old age pension was paid on 1 January 1909 to just over half a million people of 70 and over. Back then the maximum payment was the 2009 equivalent of just under £20 a week but even this could be denied that if you had been to prison, were habitually drunk or were otherwise of bad character. But even the fact we are living longer presents a problem- I knew it was too good to be true- so in 2010 we need to make real progress with convincing workers that they need to save for self reliance to a very old age.

So if the longer life angle isn’t all that positive when we scratch beneath the surface, how about work place savings? We’ve certainly heard plenty about it in 2009.

Surely the idea of harnessing technology to workplace savings will mean we can apply some new solutions to the growing problem of pension apathy? In the new digital age, technology is consistently in fast forward mode and I think we could use some of this instantly accessible, touch of a button action in pensions or rather workplace savings. And this brings me back to the name game again. The word pension doesn’t really do it in my book. It still suggests a product rather than, what I believe the future is all about, solutions.

I think it is the idea of a solution to the omnipresent saving problem that the so-called generation y will start to demand in 2010. One of the many attractions of a corporate platform is that it will appeal to young workers and it makes a great deal of sense to look to Gen Y to lead us in a new direction.

So there we have it – ending on a high after all. Let’s look to the bright young things of the future to help us navigate the savings path. I think they’ll have an answer or two up their sleeve...

Martin Palmer is head of corporate pensions marketing for Friends Provident