Speaking in Brighton today at the Institute and Faculty of Actuaries Pensions Conference Ronnie Bowie, past president of the Institute, addressed an audience which included Shadow Pensions Minister Greg McClymont and Mark Hyde Harrison from the NAPF, with his roadmap to a new and sustainable pension system for the UK.
The roadmap highlighted five key areas that need to be addressed if future generations are to enjoy sustainable pension provision:
1. Social policy which encourages flexibility; – “People will need to be confident that they can combine part time work with partial pensions and can combine pensions, savings and provision for long term care” Ronnie Bowie
2. Regulatory policy which encourages simple relevant and accessible building blocks; - current micro regulation has the unintended consequence of excluding many low and middle income earners from the long term savings market. This needs to change.
3. Enlightened self interest from employers – Employees generally trust their employer. Employers can not only serve society but also reap an “engagement dividend” by facilitating a modern and relevant benefits package.” Ronnie Bowie
4. Fit for purpose building blocks from the financial sector – “Providers need to play their part. With NEST as a benchmark it has been remarkable what commercial providers have been able to achieve in auto enrolment. The challenge is to build from here.” Ronnie Bowie
5. A culture of self reliance – “Government, regulators, providers and employers can only do so much. Employees need to engage and help themselves. Financial literacy is at the heart of better public understanding and engagement with providing for their later life income. We need to create the financial equivalent of “five a day” understanding.” Ronnie Bowie
At the conference Bowie commented that;
“The work of successive Governments will gradually lift the vast majority of pensioners out of absolute poverty, which is an admirable achievement. However if we are to achieve the level of later life income to which most aspire then all parties need to do more, government, regulators, employers, providers and citizens themselves.
It is a tall order but if we all pull together then our successors will thank us for creating the sustainable pensions system from which they will benefit. If we continue to bleat rather than build then they will rightly accuse us of a dereliction of duty.”
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