Eight changes needed to make pensions better for the young

Launched in October this year, the Next Generation (Next Gen) Pensions Committee is a movement focused on bringing greater diversity to the pensions industry. We spoke to eight members about what they want to see happen to pensions.

Launched in October this year, the Next Generation (Next Gen) Pensions Committee is a movement focused on bringing greater diversity to the pensions industry.

Seeking to infiltrate all areas of pensions, the group, made up of around 20 millennials working in various roles in the sector, has formed to assist young people entering the industry, as well as supporting those who are looking to secure and progress in higher positions.

The members of the Next Gen Pensions Committee are deeply committed to eradicating group think in pensions, providing new, diverse ideas and highlighting how the industry can progress through collaborative thought and innovation.

Committee members have spoken to New Model Adviser on why the movement is important and the change they’d like to see in the sector. 

Launched in October this year, the Next Generation (Next Gen) Pensions Committee is a movement focused on bringing greater diversity to the pensions industry.

Seeking to infiltrate all areas of pensions, the group, made up of around 20 millennials working in various roles in the sector, has formed to assist young people entering the industry, as well as supporting those who are looking to secure and progress in higher positions.

The members of the Next Gen Pensions Committee are deeply committed to eradicating group think in pensions, providing new, diverse ideas and highlighting how the industry can progress through collaborative thought and innovation.

Committee members have spoken to New Model Adviser on why the movement is important and the change they’d like to see in the sector. 

Matt Dodds, ITM director and committee member 

Dodds says it is time for new voices to be heard in the pensions sector.

‘I’d like to see a change in the expectations, and what is accepted as achievable, across the industry. NextGen brings new opinions, viewpoints and ideas which can change the landscape of the industry and help us achieve things that have otherwise been ruled out as not worthy, too difficult or just unattractive.

‘If we can encourage new voices and opinions and help them be heard, we’ll also make it a more exciting and rewarding sector to work in, which is another positive.’

Matt Burrell, ABI policy advisor, long term savings and committee member 

Burrell talks of the need to enthuse the next generation and calls for the establishment of open pensions.

‘To me NextGen is about helping young people to realise that pensions are not only crucial for our future as a country experiencing demographic change, but it’s also one of the most vibrant parts of financial services sector. A big part of getting the next generation enthused is ensuring that some of the people representing the industry are people they can relate to, showing them that long-term savings is a progressive, forward-looking sector.

‘The single biggest change I would like to see is for people to be able to access their pensions data easily and in a manner of their choosing. People who’ve grown up with technology want to be able to access their information on their own terms, and open banking has shown how powerful this can be; now we need Open Pensions. The auto-enrolment generation will have more choices to make about their pensions than any other, it’s only fair to give us the right tools.’

Caroline Escott, PLSA investment and stewardship policy lead and committee member

Escott states the need for diversity in the sector to respond to more people’s needs. 

‘I’d like to see the importance and relevance of younger voices recognised in every part and at each level of the sector. With a new generation of young savers being auto-enrolled into schemes, the pensions industry needs to become more diverse to respond to these savers’ needs. 

‘I’m delighted to be a part of NextGen, which I think will play a vital role in supporting both new and more established young people in the industry to develop and progress.’

Tom Hibbard, investment reporting specialist and committee member

Hibbard says it is important to bring open pensions and age diversity to the pensions world. 

'There are two key changes, which I would like to see in the pensions industry over differing timelines. More immediately, an introduction of 'open pensions' regulation that will allow investment and administration data to easily flow to dashboard providers and allow savers to more easily access their pension information.

'Over a longer time frame, technology should allow savers to select a retirement savings tool independently of their employer that they are able to maintain as they switch jobs across their lifetime. (Both these initiatives would seek to increase saver engagement and improve member outcomes.)

'I would like to help drive further age diversity on pension scheme/provider decision making boards, across industry committees and within conference & media discussion. The average defined contribution (DC) saver in the UK is approximately 37 years old and it would be great to see better representation from their peers across the pensions policy, investment and technology spheres.'

Jesal Mistry, Hymans Robertson senior DC Consultant and committee member

On ensuring that the pensions industry remains representative Mistry says: 'I want to ensure that the pensions industry remains relevant and representative of the people we are here to serve and it is important that we plan for the future. 

'NextGen is all about the future and helping our industry evolve and move forward in a way which results in success. I am hoping to encourage a wider and more diverse representation within the industry, particularly for younger people, females and other ethnic backgrounds – this can only lead to more engagement and better outcomes.'

 

Iona Bain, Young Money Blog and Agency founder and committee member

Bains says the pensions sector currently runs the risk of not providing guidance and information to younger cohorts. 

‘I want to see a recognition that we have no choice but to engage with and advise younger employees who have been automatically enrolled. Yes, there is a risk that this strategy could lead to young people asking more questions of their schemes or possibly opting out to meet other urgent financial needs...but I think there's a far greater risk if the industry does nothing, creating the potential for disillusionment and mistrust in the long-term.

‘The young pensions problem is now on the mainstream agenda but it is very often being debated without any representation from the generation in question. This is barmy. The next generation in pensions has so much to offer, from trustees to tech developers, and they will be the key to unlocking the young pensions problem in the long-term.’

 

Michael Watkins, Smart Pension head of proposition development and NextGen co-founder

Watkins wants financial education and simplification of pensions-related information. 

'The change that I'd like to see, is financial education in schools, and the simplification of the products, and communications that we issue to consumers.

'We focus on outcomes, without providing consumers with any indication of what, or why it's essential to their lives. As we move towards a generation that will be poorer than previous generations, in relative terms, it's essential that we equip them with the tools, and information needed to positively affect their outcomes.'

David Whitehair, Franklin Templeton Investments director, DC business development

Whitehair calls for younger decision makers on industry boards.

'I would like to see more people, particularly younger people, having the confidence to apply for roles on decision making boards within the pensions industry. Coupled with this, it is important that more boards seek new voices to promote cognitive diversity.

'The aim of next gen is to provide opportunities for people to build knowledge of what is required of a trustee, to meet and learn from experienced trustees as well as providing another medium through which the ‘next generation’ can be approached for open roles.'

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