Standard Life’s Jamie Jenkins on nudge theory for the over 55s

Jenkins-Jamie-Standard-Life2--2016

Standard Life head of pensions strategy Jamie Jenkins has a solution to the retirement savings gap. Unfortunately, however, it is not a quick fix. “What we need is a savings culture,” he says. “Automatic enrolment is nudging people towards that but it’s just the start of the process. We could have people saving for their retirement at reasonable levels in 20 years’ time but it’s not something you can solve overnight.”

Jenkins wants to play a part in bringing about this savings culture and making a difference to people’s retirement prospects. He says: “I’ve devoted most of my working life to this cause in various ways and it seems a worthy thing to do.”

Indeed, having spent all 27 years of his working life at the same company, Jenkins has viewed all aspects of pensions “through a Standard Life lens”. The photography analogy may be a subtle nod to his artistic side that could have set him on a very different career path. He planned to study graphic design, following in the footsteps of his music hero David Bowie who was once a graphic designer. He also wanted to be a singer and has achieved that to some degree by being in a local band.

“The honest truth is I wanted to be David Bowie. Despite his passing earlier this year I’m still a very big fan.”

Jenkins joined Standard Life in 1989, choosing it instead of a job as a trainee pilot which “looked like a slog”. The intention was to stay a year or two then go to university. However, he ended up staying on and moving through the ranks. As the firm’s head of pensions strategy, policy is now his bread and butter but over the years he has turned his hand to everything from administration and customer service to marketing and proposition development.

Years spent building up knowledge from all aspects has its uses but keeping on top of “the ever-changing political landscape of pensions” is a constant challenge.

“I do an awful lot of reading. I see what other people are saying and more importantly I meet a wide variety of people with different views. It’s easy to get polarised on the views you agree with.

“A good example of that is how people tend to surround themselves with views they like on social media. They befriend people and follow people with views they want to hear, rather than those they could hear.”

Those who follow Jenkins on social media will know that he also fits in life on the road as a top 100 world-ranking billiards player. “Like any sport it requires practice and being away from home. World rankings require playing in a dozen tournaments from Edinburgh to New Zealand. Obviously I can’t do all of those. Work comes first.”

For Jenkins, the workplace is very effective at nudging people towards saving for their retirement. “Auto-enrolment is an unparalleled success in terms of the people it is bringing to saving. In terms of what else we can do there are things like auto-escalation to increase contributions. We’re big fans of that but ultimately it’s about engagement. Not everyone agrees with me, though. Some say we need to nudge people or use compulsion.”

He believes the next big challenge is to engage people between the nudge they get from auto-enrolment at age 22 and after age 55, when they have important decisions to make. “The framework for engaging people is clear. Now we can take it as read that we nudge people with zero engagement at 22 but that has to increase as a person reaches 55 and continue thereafter. If you plot this on a graph zero engagement is fine at 22 but at 55 a good level of engagement is necessary.”

The good news is that people are becoming more engaged in pensions, something Jenkins says is evident from the calls Standard Life gets about auto-enrolment. But there is still a way to go and Jenkins thinks the next stage is for people to start asking whether their employer’s pension scheme offers the bare minimum or something better.

Going forward, as more people build up pension savings through auto-enrolment, it raises the conundrum of how to get the mass market thinking about their advice needs and how those needs can be delivered cost-effectively.

“Everyone is a part of the mass market at some point unless they start off as a high-net-worth. It’s a life stage rather than a group of people.

“Perhaps technological delivery will get people thinking, being able to see their growth in savings online in one place and getting a sense of how it is doing. But the pensions dashboard will need the political will of providers to take up the Government challenge.”

Jenkins can also be added to the growing list of people who see robo-advice only as an aid to traditional delivery. “Robo-advice is like power steering: it’s there to make steering easier not steer for you. Parts of the advice process are about collecting data and numeric decisions, which can be digitalised, but you need to recognise when an algorithm can’t perform a function.”

He is convinced technology cannot help with the emotional element of financial advice. “You need to know when to switch to a human and to technology, and then when to switch between the two.”

Another issue that worries Jenkins is how older pensioners in their 70s and 80s will fare post-pension freedoms where they have changing needs and a diminishing capacity for making decisions.

“That is something I’m conscious that we need to spend more time on. The level of income is guaranteed with an annuity, but if older people are in drawdown they may have long-term care decisions to make, unadvised or unsupported. We have time to get this right; we shouldn’t leave it until today’s pensioners get to that age.”

Five questions

What’s the best bit of advice you’ve received in your career?

Do the right thing.

What keeps you awake at night?

Losing by a single point in billiards.

What has had the most significant impact of financial advice in the last year?

The pension freedoms.

If I was in charge of the FCA for a day I would…

Move firmly away from product-orientated regulation to a more holistic consumer-centred one.

Any advice for new advisers?

I would say it is a noble profession even if some don’t always appreciate it.

CV

2013-present: Head of pensions strategy, Standard Life

2011-2013: Head of workplace strategy, Standard Life

2009-2011: Head of strategy & proposition, Standard Life

1989-2009: Various administration and customer services management roles at Standard Life