“In the past, you worked for one or two employers, were in a final salary pension scheme, retired and only lived for 10 more years. The concept of a job for life is completely gone now. People are working beyond 65, or leaving before then because they need or want to. We need a more flexible package of money for later life.
"There have got to be other things out there, beyond pensions, and they’ve got to be flexible. We are implementing a broader savings opportunity, which includes Save As You Earn (SAYE) and Share Incentive Plans (SIP). Those are tax efficient vehicles that allow you to save in a different way, as part of a balanced portfolio. People are coming out of higher education with a lot of debt and saving for deposits – there are other demands on their income.
"I don’t think retirement exists in the same traditional sense any more. I don’t think retirement is even the right word any more. People will move towards a period of doing less work – some voluntarily; some will be forced. There are all these wonderful pensions forecasting tools, but the most uncertain thing is your retirement date. Most of us are capable of working beyond 65, but that age is stuck in our minds.
"I didn’t see the changes coming. I welcome the changes and flexibility but I think there’s a danger employees don’t know what to do with the choice. And I do worry about the constant changes to pensions legislation, which is meant to be long term.
"If we were to start a business now, would we offer employer contributions to a DC pensions plan? I think we would offer an investment contribution instead and say: here is 12% and here is a range of vehicles – SAYE, SIP, pension, ISA – and you can choose your mix. It would give employees much more choice of what they save, and much more engagement in their savings.
"We need to do employee investment communications to all age groups and engage them throughout their career. Pensions aren’t the right option in every circumstance, even as you get nearer to retirement, when you could take advantage of tax-free savings.”