Unpicking the various consequences of these changes for members, employers, pension providers and the Government is a large job, which those of us in the policy world have been working away at. As part of the transition, the Government has brought several guidance bodies together, under the banner of the Money and Pension service (MaPS), in order to provide individuals with holistic lifetime financial guidance in an increasingly complex landscape. And the work that MaPS is doing really gets to the heart of the matter. If industry, the Government and support organisations don’t respond in a sophisticated and nuanced way to all of these changes, then the people that will ultimately suffer are the members who are counting on the system to help them to achieve an adequate retirement income.
I wish I had a simple answer to how we do this. Once you drill down into all the factors which need to be considered, for example, behavioural economics, cost to the Government, cost to industry, support from employers etc. it becomes clear that the ‘answer’ if it exists, is a complex approach, built on consensus which takes into account the (often conflicting) needs of all stakeholders. Clearly, this has and will continue to take some time.
In the future landscape, which, I suspect, will involve a much more sophisticated virtual offering of advice and guidance (supported by the upcoming Pensions Dashboards), and more comprehensive information on the quality and sustainability of investments, technology will provide the infrastructure for each new development. Which brings me to the point of this article.
The design of policy and the development of support will only ever be as good as the underlying technology that provides access. Industry and policy-makers will need to continue to invest in and see technology as an essential enabler for the evolution of the policy world if we are to reach the common goal of developing an affordable system which provides members with sufficient opportunities to achieve adequate retirement incomes.
This article was featured in Pensions Aspects magazine October edition.
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