This is unquestionably the most important year in the history of the human race.
If you take it as read that I’m approaching things from a pensions perspective, and that automatic enrolment is – arguably – the most important element right now in our country’s savings strategy. Then add to that the fact that around five hundred thousand employers are staging this year, more than the number of pension schemes established prior to now; probably since the beginning of time. And with six million people enrolled and more than nine in ten staying in, that makes it the best thing since sliced bread (apart from Pickled Onion Monster Munch).
Yeah, yeah, people will say that the contribution levels are too low and eight percent isn’t really eight percent and small employers won’t champion it and non-one will stay in when contributions increase and the new Lifetime Indvidual Savings Account will see everyone opting out next year and blah, blah, blah.
And yes, there will be fines for employers not managing to do things on time, or wilfully avoiding their duties. And there will be debates about the rights and wrongs of the fines and the impact on business and wages and so on. People will say the combined impact of minimum and living wages is too much of a strain for business and the balance between pay adequacy and job security is upset. And that Public Sector get it too easy on pensions and need to absorb more of the austerity.
We’ll discuss the charge cap and whether it should be this or that, yet ignore investment defaults, where real differences are to be found.
We’ll debate the nuances of advice while – separately – people hand their life savings to criminals, fixated on stealing everything that pension freedoms can throw their way.
People will keep cashing in their smallest pots until such time as they start to see the cumulative value and begin to realise their retirement savings are no longer trivial.
We’ll debate the differences in who gets what when from the State Pension, until such time as it starts to level out for everyone. Then we’ll change it again.
And I get that not a single person under 30 is remotely interested in pensions and they can’t picture what life will be like the next morning, never mind in old age. Their primary engagement is inertia. That’s ok.
Fact is, automatic enrolment is a one or two-generation plan in the making. We won’t get people adequately saved in a year or two. It will take twenty or thirty or even forty years. But just because it stretches well beyond my working life (or, more likely, actual life), doesn’t mean it isn’t worth doing.
This is make or break for automatic enrolment. And the human race is depending on it.
Post scriptum; I challenged myself to write this with ‘no acronyms, no abreviations, just on one page.’ Tick.