While 2016 was filled with headline grabbing changes - Brexit and the election of Donald Trump - to name but a few, 2017 has been less about drama and more about steady progress towards the future.
Take auto-enrolment. Latest figures from the Department of Work and Pensions, announced just this week, show that nine million workers have been brought into workplace pension schemes since its introduction in 2012. That’s an extra million since the last set of figures in June. Pensions minister Guy Opperman called it a remarkable achievement, adding that auto-enrolment has “changed savings culture in this country forever.”
And, while the roll-out enters its final stages, our attention is increasingly turning to the next phase - increased contributions scheduled for April 2018, and the proposed pensions dashboard. No big surprises, but steps towards embracing the future.
But not every change comes amidst such positive results. Large company schemes have continued announce closures this year, with corporations unable to cope with their scheme’s deficit. High profile schemes under threat include Royal Mail, British Steel and most recently British Airways, which has just announced the closure of its defined benefit scheme closed with a crippling £2.8bn deficit.
As the pensions landscape evolves; the need to think outside the box becomes ever clearer. The industry must continue to educate savers about the need to prepare for a different future.
Food for thought: The 100-year life
Lynda Gratton, Professor of Management Practice at London Business School, and author of the globally acclaimed book ‘The 100-year Life’, spoke at this year’s PLSA conference about what increasing longevity means for work, saving and retirement.
She told delegates that living longer isn’t just about the last 20 years of life and needs re-thinking how we approach life completely.
“We used to think about life as three stages: full-time education, full-time work, and full-time retirement. Each one of those stages will now change and what we think about now is a multi-stage life where you’re educated right the way through, you work right the way through but you also have time for leisure and retirement right the way through – you mix it up more.”
“The challenge is that it is happening very quickly. Every 10 years we live another two years longer, every five years technology changes – so there’s a lot of change happening. In general people are quite good at deciding what they want to do differently, but institutions, government policies, corporate policies, tend to lag behind. It takes them a lot longer to catch up with what it is people want to do.”
“Companies have a very old-fashioned view about what it means to 50, 60 or 70. Governments have to change policy but corporations have got to realise that many people will now want to work into their 70s, and why shouldn’t they?”
