It is an undeniable fact that the UK population is ageing. As with many of the so-called demographic timebombs, the financial services industry knows how serious the implications are likely to be.
While some consumers are becoming increasingly aware of the need to ensure that they have adequate pension provision, far too many still trust the state to provide. Ostrich-like, they hope they will be left unscathed by the reduction in the standards of living and healthcare which the large ageing population, supported by a dwindling band of workers, will inevitably experience if it relies on state provision.
Many people still do not realise that the solution must lie with each individual, who must increasingly take the responsibility of saving for old age. It is up to the industry to help turn vague awareness into decisive action.
Pension provision will be the major focus and anyone working in pensions must have a thorough grounding in all aspects of the business. From March 31, 1999 the PIA will require any firm applying for permitted activity 13 – pension transfer and opt-out business – to have an appro- priately qualified pension transfer specialist.
The Chartered Insurance Institute's G60 pensions qualification is recognised by the PIA as providing proof of that expertise.
The CII is a leading provider of financial services qualifications through its Financial Planning Certificate and Advanced Financial Planning Certificate.
The G60 syllabus is comprehensive and can be taken as a stand-alone qualification for candidates who choose to specialise in pension business as well as a paper towards the full AFPC qualification.
There is no doubt that the G60 qualification will be put to increasing use in the industry.
The statistics are startling. Almost one in three people today are over 50. By 2026, the number will have swelled by another 10 per cent. Only three years ago, in 1995, there were fewer than nine million people over 65 in the UK. By 2030, there will be some 14 million. Improved standards of nutrition and healthcare are amongst the triumphs of this century. Life expectancy is now around 80. When the National Health Service began in 1947, life expectancy was around 50 years.
At the other end of the scale, people are having fewer children and they are having them later. In 1996, more women aged 30 to 35 had babies than those aged 20 to 25. In 1961, there were four people of working age to support each pensioner. The burden will fall on only two workers for each pensioner in 2040.
To address these and other problems facing our society in the first half of the next century, Age Concern has set up a colossal thinktank, The Debate of the Age, which was launched on March 5. Chaired by Howard Davies, chairman of the Financial Services Authority, the committee includes Rabbi Julia Neuberger, chief executive of The Kings Fund, Lady Sally Greengross, OBE, director general of Age Concern and representatives from academia, business and the media.
Under their direction, a large swathe of the general public will be invited to participate, contributing their ideas on the shape that UK society should take in the coming century.
The pension industry will have a key role to play in this reshaped society. Possibly, it will provide some products to fulfil the role of the Individual Savings Account and certainly it will need to expand the range of pension products to offer a variety of both personal and stakeholder pensions.
It is for this reason that the CII has designed courses of the highest standard to ensure that pension advisers and providers and other professionals advising on pension planning are fully informed about all aspects of pension provision.
Open to candidates who have already reached the standard of the FPC, the G60 qualification can be taken by candidates on a stand-alone basis to provide a more specialised service in pensions and pension transfers.
There are three papers, each of three hours' duration, giving a total of 200 marks.
Section A, for 45 marks, is compulsory short-answer questions to test knowledge across the syllabus. Section B, for 75 marks, is a compulsory case study to demonstrate analytical and application skills. In section C, which accounts for 80 marks, the candidate has a choice of two out of three structured essay questions.
The general syllabus has been designed with the changing demographic scene firmly in the frame but is also detailed in its test of the candidate's knowledge of the whole pension industry. Its 23 sections cover the basics of pension planning and the construction of suitable solutions, compliance, investment and the relationship between the retail price index and investment yields. It also takes a look at legislation and surveys the full range of pension products currently available.
As a sound working basis for any adviser focusing on pension business, we blieve the qualification is essential. The deeper the knowledge of pension professionals, the more they will be able to convey clearly and effectively the action which each individual will have to take to make adequate provision as the population ages.