View more on these topics

Compulsion obsessives

Pensions are one of the big issues dominating this year&#39s political party conference season.

By the time you read this, the Labour Party conference will be drawing to a close and, as at the Liberal Democrats in Brighton last week, the state of UK retirement provision will have catapulted itself still further towards the top of the political agenda.

While the number of financial services businesses exhibiting at each of the three main party conferences may be down on last year – an obvious result of the state of world markets – the urgency of politicians&#39 language on the issue has become quite striking.

Earlier this year, I attended yet another conference on pension reform – such is the life of a political consultant. The keynote speech was delivered by Labour MP Frank Field, a thinker known to everyone who reads Money Marketing. He warned of the consequences of prolonged inaction over the death of final-salary schemes.

As ever, Field noted not just the policy need but also the likely reaction of ordinary voters. He said the death of final-salary schemes was perhaps the single biggest issue facing Middle England that the Government would have to deal with and, if not resolved quickly, would cause considerable angst in the country. How right he is turning out to be.

Organisations such as the FSA, Standard Life, Scottish Life, AMP, Unison and Age Concern are all attending the party conferences this year to talk about pensions. So far, these organisations are certainly getting their money&#39s worth. Every meeting on the issue is full to the brim, which demonstrates how the issues have bubbled to the surface in the past 12 months.

The ABI has been running a series of fringe meetings at the conferences focusing on the savings gap. This is the oft-quoted but much misunderstood figure of £27bn which represents the extra amount that we need to save in the UK to provide a decent retirement income.

At the Liberal Democrat conference, Mick McAteer from the Consumers&#39 Association made some interesting new input into the debate. He opened by making the usual calls for compulsion and simplification. He also called for the creation of a Financial Futures Commission. Its purpose would be to help the industry model product design based on economic and demographic developments.

Some might say this is all very Orwellian but I think it makes an interesting contribution to the debate at a rather opportune time. It is fresh thinking we need to see in the coming months.

LibDem work and pension spokesman Steve Webb MP echoed McAteer&#39s comments on compulsion and, increasingly, more and more backbench politicians are starting to utter similar noises. The mailbag from constituents angered by the compulsory annuity purchase rules or by the disappearance of their workplace pensions continues to grow.

“Pensions are sexy,” said Webb. I think that is political speak for: “My God, we can&#39t keep up with this.”

Compulsion is becoming an increasingly palatable truth for voters who desperately want to save their company schemes.

When all is said and done, MPs will return to Westminster at roughly the same time as the Government produces the Green Paper on pensions.

Now, many politicos have groaned that this is just another Green Paper and they may well prove right. However, such a momentum is building among backbench MPs, unions, employers and the wider electorate which is, hopefully, feeding into the thinking process.

There are very few times in politics when the national mood allows MPs to take action which, while initially unpopular, will transform opportunities in future. There are also few times when a financial services issue such as pensions takes centre stage.

But there is a major challenge here. Despite the activities of many of the organisations I have mentioned earlier which have actively campaigned for change at the party conferences, much of the rest of the financial services industry remains relatively silent on the issue. In particular, it is the asset managers who are not engaging on pensions right now and leaving it to the life companies.

While they may argue that life companies still have all the pension power, asset managers should be in pole position to become the engine rooms of future provision and now is the time to make these arguments to the Government.

No doubt, the Conservative party conference in Bournemouth next week will be mixed with talk of pensions in crisis.

This year, I have found the sea air a little more bracing than usual. Perhaps it is because the current climate has injected some realpolitik into proceedings. Long may it continue.

Iain Anderson is director and chief corporate counsel at Cicero Consulting


Professional Adviser Alliance will potentially get 15m new mortgage leads

The Professional Adviser Alliance, formed of intermediaries around the UK, has the potential to receive leads from 15 million Sky Active TV users as a result of a deal signed by its parent company, PAA says 15m digital satellite users will be able to search for mortgages and loans from home and can request […]

A&L rejects centenarian&#39s cash

An IFA has hit out at the inflexibility of the FSA&#39s money laundering rules after a 101-year-old client&#39s £170,000 investment in a two-year fixed-rate bond with the Alliance & Leicester was refused.Croydon IFA Dennis Munday says centenarian Phyllis Grogan had her application turned down because of insufficient identification.Mrs Grogan&#39s nephew, a senior partner of Streeter […]

Royal descent

Bob Mendelsohn was the man drafted in to try and make a difficult match between Royal & Sun Alliance work. It is a shame that he is no relation to Felix Mendelsohn, the Wedding March composer, who could maybe have offered some much needed advice on harmony. The chief executive finally stepped down this month.To […]

Threadneedle eyes up health stocks

THREADNEEDLE INVESTMENTS THREADNEEDLE GLOBAL HEALTHCARE FUND Type: Oeic Aim: Growth by investing in pharmaceutical companies, biotechnology, healthcare providers, medical supply companies and producers of advanced medical devices Minimum investment: Lump sum £2,000 Investment split: Pharmaceuticals 55.5%, healthcare 14%, biotechnology 9.5%, medical technology 7%, medical supplies 8.5%, cash 5.5% Isa link: Yes Pep transfers: Yes Charges: […]

William Littlewood “betting that QE won’t work”

Journalist Alexis Xydias interviews Artemis manager William Littlewood about his views on bond, equity and currency markets and the impact of a Greek exit from the EU. With bond yields at “ludicrous” levels, William believes a tipping point for bond markets is sure to come. As a result, his Strategic Assets Fund holds government bond shorts to the tune of 100 per […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm