So what is suffering at the hands of such profligate lifestyles? Without wishing to sound like my father, it is savings, of course. People want a flat-screen TV, they don’t want a pension. Our job is to help them understand that they will surely one day need an income and the TV will have gone to the tip years ago. But as the saying goes, you can lead a horse to water but you can’t make it drink.
Now, I would say I am pretty well qualified to comment here as I still manage to get out and about and rub shoulders with all sorts. Just in the last couple of months, we have been fortunate enough to install new staff benefit packages for two excellent little companies. They are both a smidge high-tech to be representative but suffice it to say, the staff are well paid and have no excuse to not join the excellent pension plans on offer.
When I say no excuse, for one of our new schemes, I mean no excuse. In place is a stakeholder pension (not really a stakeholder pension but we still call it that – it has all the makings of a proper group personal pension plan) with Norwich Union. It has a 0.5 per cent annual charge, decent fund links and it is 5 per cent employer-paid non-contributory to boot. Yet we have 14 out of 48 staff not enjoying this giveaway, freebie, pay rise, call it what you will.
Having said that, we still come along and sit down with them to make sure they are not doing something really daft. Funnily enough, I cannot think of a single thing just now but you get the picture. It at least gives me the chance to remind them of the other staff benefits.
But we have to ask ourselves where we have failed. Putting means-testing madness aside for just a minute – together with personal accounts and maybe employer reluctance – and think about these 14 people. The feedback I got when I managed to see seven of them during a recent visit was varied to say the least.
One guy thought it was going to cost him something. Someone else had never got round to it. One lady thought she was too old (she was 45).
Now, I know it is not my fault. I am the one who has highlighted the problem and is doing something about it. You could argue it is the employer but I do not think so – it is paying me handsomely to sort out the mess.
How about the provider? Nope, it has an absolute corker of a contract for the staff. What about the previous advisers? I am going to be kind and put this one down to big broker/small client apathy. Or maybe we can blame the media but again, I am going to be nice and put that aside for now. So that leaves the FSA, I fear.
Clearly, some of the staff at my new client might be viewed as a bit feckless but I am not sure you can pin that mantle on a third of them. After all, they cannot all be daft as the company would have failed years ago. So we have staff who have no confidence, little motivation and a complete lack of understanding as to why they should participate in this strange thing called a pension.
I suspect the answer, as is often the case, is a little bit of everything all rolled into one but it is the job of the FSA to cut through all this nonsense and try and make some sense of it all. It needs to let markets find their own level and people do their jobs unencumbered by interference from parties that know little about the outside world.
Tom Kean is a director at Thameside