In an ideal system financial education is vital for everyone, starting with school kids – concepts such as the power of compound interest, percentages and avoiding scammers are as important as being able to read and write.
It should also be a legal requirement to provide financial guidance as a standard employee benefit at all firms with more than 100 employees. Employers spend millions on pensions provisions for the staff but too often leave them in the lurch at retirement.
They have a moral responsibility to do more. Yet legislation also prevents trusted employers from doing anything resembling financial advice.
Your ‘bread and butter’ work
Help others to help yourself, as so many good advisers are already doing. Financial education, whether in schools the workplace, universities or individual coaching of clients, should be every adviser’s bread and butter – the emphasis on life coaching and ‘hand holding’ was how SJP became a successful FTSE 100 company.
Why not visit your local university, college or school and offer your services? Such work, even on a pro-bono basis, could not only benefit the community but lead to more business.
We need a 70-year time horizon in pensions
No one wants change every five minutes. On tax, pensions don’t currently work for anyone, neither the poorest in society or indeed the prudent middle earner who could easily overfund their pension in 40 years.
Recently I was at a National Portrait Gallery lecture (highly recommended) on how they preserve their fine 500-year-old Tudor portraits for posterity.
The conservation expert told me that when a painting was overhauled, repairs were expected to last for 70 years. It should be the same for pensions.
Yet reforms don’t seem to last for five years, let alone 50 years. Thousands of people near the lifetime limits do not want to overfund their pension if Labour changes all the rules, yet again.
Despite this diatribe, the UK is still a pension top 10 nation – a respectable rating but we all could do so much better. Time for a few pensions industry new year’s resolutions?
Happy new year!
Stephanie Hawthorne is a freelance journalist
