Give me dull performance any day.

Looking at asset manager advertising in preparation for a pitch this week got me thinking about why we need to see 50% over 5 years and similar big numbers. We’re trained to see these figures as good, but if the last 18 months have shown anything, it’s that the bigger the upside, in general the bigger the downside.

And the real reason that we need this kind of performance is that as a species we prevaricate. It’s only when the problem is looming that we start doing. And when it comes to retirement that’s very bad news. Starting retirement plans in your 30s is simply too late, and even your 20s is leaving it a bit late. No, the real answer is to start preparing for the end of a life when it’s just beginning. Start investing an achievable £178/month at age 1 and you get £1,000,000 at age 66, needing only 5% pa compounding; to get the same sum starting at 30? A slightly less achievable £898. To get that nice round million using £178/month over 35 years that easy 5% pa has to rise to a slightly less easy (and probably more risky) 12.09%. And of course most pensions start later.

So if I’m lucky enough to have grandchildren one day maybe I’ll do something super sensible and take out a pension for them. That really would be a gift that kept on giving!

Jim Poulter
Client Services Director

A statement about my pension .... or my provider?

This week I got my pension statement, detailing my family's projected quality of life post-work. The standard low, medium and high projections were there as always, alerting me as to whether I can look forward to a cup, bowl or full plate (ooo!) of flavoursome gruel in my dotage.

Given the past year and the stock-market's nose-dive, expectations were not high. My level of interests were high, however, as my pension is the primary mainstay of my standard of living from retirement to pearly gates.

So what information does the provider I have entrusted with this important task give me? A standard letter telling me this is my bi-annual statement (I knew that) and a lovely statement with standard projections, confirming the decline in my pension (I guessed that). Nothing else. Nada. Zip. Same letter (apart from the date) as I got during boom time in fact.

I had a hundred questions. How much of the drop in my pension was down to poor provider performance (say, in relation to benchmarks) and how much down to markets? Were there elements of the underlying funds that were performing fourth quartile and I should ditch?

Frankly, a little added value from my learned provider would have been appreciated. What was my learned provider's view on the next six months? Their view on fund classes? Of changes in legislation and taxation that could benefit me. What about an outbound phone call asking me if I have any questions. I just feel they are taking the money sometimes. They are charging me after all. I've had to change providers over the years and, unfortunately, I can report that the same experience is meted out by all the household name providers I've been with.

Research (and common sense) shows that the receipt of statements has a direct impact on perceptions of the provider's brand (and from there my likelihood to recommend them or buy other products from them). Unhappy experiences we also relate to friends and relatives, passing on our perceptions. Wouldn't even cost much, if that's the barrier that's put up.

Pension statements are often the only direct communication brands have with their pension customers, so isn't it an opportunity to give a little thought to?

Oh yes, I'm changing providers in the next two months, did I tell you?.

Mark Hollander
Client Services Director

At last! The best thing I’ve read about the pensions debate for years…

Just read this and thought it was the best thing I have read about restoring faith in pensions in the UK for ages. Read more here!

Jo Parker
CEO

How will we fund our retirement now?

The EU has announced today that compulsory retirement at 65 is NOT unlawful. This could turn into a UK law that is both short sighted and out of touch. Given that people’s pensions are insufficient (or even non-existent), the cost of living keeps on rising, and we’re living longer, why should those that are healthy and happy to work beyond the age of 65 not be able to do so? The Government’s continued and sensible policy of self-funding our retirement is fine. But it’s far too late for people in their 60s to make a significant difference to the return on their investments and secure themselves a prosperous retirement.

Either people are given the guarantee of a financially secure retirement (not going to happen any time soon), or they are allowed to continue to earn a wage if they choose to do so. Please don’t completely lose sight of the short term picture, and please help people to help themselves.

Montse Tojeiro

Interesting recession initiatives are food for thought

Have you seen that Barclaycard has cut interest rates for those struggling with finances and will not contact late payers for up to two months, as long as they are actively working to sort out their financial difficulties? And TUI has announced that Thomson and First Choice will offer redundancy cover on holidays and flights? TalkTalk has also launched the Emergency Plan which waives the £6.49 monthly charge for Internet and phone access.

The question is that when it comes to insurance or savings or pensions are we doing enough to help customers manage and keep covered? Simple stripped down products, premium holidays at no charge so people can keep covered or saving could be really useful and be seen as truly Treating Customers Fairly. Come on, let’s think like retailers!

Jo Parker
Chief Executive