Delivering his first speech as NAPF Chairman, Ruston Smith welcomed the reforms that have seen 1.6 million people automatically enrolled into workplace pension schemes.
But, acknowledging the six to nine million who are expected to start saving for their retirement through auto enrolment, he argued that the industry had to do a lot more to make people trust pensions.
Mr Smith pointed out the important role that the pensions industry has to play in helping people save for their retirement and helping them make the right decisions at retirement – and the influence they have on individuals’ outcomes and wellbeing.
Speaking at the NAPF’s Annual Conference & Exhibition in Manchester, Mr Smith set out four ‘big steps’ that the industry needed to take in order to ‘build on today for a better tomorrow’.
The first was to raise awareness, and he cited the NAPF’s Pension Quality Mark, which helps people recognise more easily what quality schemes look like. The second was to make pensions simpler by “junking the jargon”, to encourage simple conversations that people understand about pensions.
Mr Smith outlined the other two steps:
“Thirdly, we need to develop more innovative and creative products and services – to recognise pension savers’ changing needs particularly at retirement, and the need for products that reflect people’s retirement choices and life patterns when they get older.
“Linked to this, we need a more flexible pensions framework for individuals and employers. People’s lives and expectations have changed. So we need to face into that challenge together.
“Finally, we need to build confidence. That means we need trusted institutions. And it means we need to tackle the difficult questions and vested interests so that saving for retirement is something that works in the interests of the saver – and not against it.
“In short, what we need are ‘Pensions People Trust’. Pensions people trust to deliver a decent income. Pensions people trust to be there when they retire. Pensions people trust not to ‘rip them off’.”
Mr Smith also announced the launch of the NAPF Academy:
“The NAPF Academy is an important and exciting new initiative. It brings together, more thoughtfully and strategically, all our existing training activity. But it will do more than that. We will, in collaboration with others, support our industry by extending our training activity, making sure we build capability, reach new audiences involved in pensions and develop the future leaders of our industry We’ll be partnering with leading universities and, in these modern times, we’ll be offering courses and training through a variety of media.”
Looking beyond the next two years, Mr Smith talked about the need for a vision for the next decade. But he pointed out that, particularly with an ageing population and the country’s future economic needs, there were challenges that extended beyond pensions that we haven’t even started thinking about as a nation, never mind tackling them. These included labour market, health inequality and long term care issues. He posed the question around inter-generational challenges – how we create more employment opportunities for older generations when youth unemployment is now running at 20 per cent.
But Mr Smith shared his confidence about the future, seeing this as an opportunity, and called upon regulators, legislators, the media and the broader industry to work together to capitalise on the foundations of the proposed Single Tier State Pension and Automatic Enrolment to build sustainable confidence in pensions and to develop pensions people trust.
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