Talking Head: Redington’s Rob Gardner lays bare his wants for the future of pension saving, including a truly long-term plan and financial education.
The world has a number of philanthropist billionaires, but I don’t think we have ever received such a clear vision for the future.
This vision is built on a fundamental message: through the advancement of human potential our children can grow up in a better world than we did.
No cash flow concerns for Facebook, but for DB schemes…
Mark Zuckerberg pledged to give away 99 per cent of his Facebook shares – an estimated $45bn (29.8bn) – during the course of his lifetime, after the birth of his first child last week.
With a personal wealth estimated at $44.6bn, Zuckerberg can well afford to channel a steady cash flow towards philanthropic causes over the next 50, 60 or even 70 years.
But for many of the UK’s DB pension schemes, meeting cash payments when they fall due will not be quite so easy.
Click here to read Cash flow crisis: How to avoid becoming a forced seller
To achieve this, Zuckerberg wrote that we must make long-term investments over 25, 50 or even 100 years – that the greatest challenges require long time horizons and cannot be solved by short-term thinking.
He also believes we must participate in policy and advocacy to shape debates.
Do the right thing
As I survey the pensions landscape and reflect on a still-brewing defined benefit pensions crisis and the huge challenge of delivering an effective way of funding the next generation’s retirement, I share many of Zuckerberg’s sentiments.
With a new and better horizon in mind, I’ve got three Christmas wishes.
The first is that I would like to see the government set up a long-term committee, free from political affiliation, whose goal is to do the right thing for our long-term savings and pensions industry.
The second is that we collectively encourage all people, but especially young people starting work for the first time, to save and invest for their future.
So few realise the potential of saving and investing to transform their lives for the better in years to come.
If you could help someone save £100 a month for the next 30 years, the value of starting at 25, rather than 35, is well over £40,000. Changing behaviour can have a transformational difference on saving
It’s understandable: delayed gratification for better things tomorrow is not always a compelling concept.
Companies must help by positively engaging with and supporting their young workforce on saving.Thirdly, I wish we can help people really understand how they can save more. Central to this is budgeting.
The secret in life is being able to know the difference between wants and needs. Over the past 20 or 30 years we have become obsessed by the things that we want above the things that we need.
And whether it was Black Friday, where shoppers spent £1bn on things they didn’t need, or whether it’s people like myself, who spend £1,500 annually on coffee or those who spend nearly £500 a year on scratch cards, how can we help people to budget and spend a bit less so that they can save it for tomorrow?
Little savings can have big impacts. If you could help someone save £100 a month for the next 30 years, the value of starting at 25, rather than 35, is well over £40,000. Changing behaviour can have a transformational difference on saving.
Christmas is a time when we can reflect on friends and family – let’s hope we can work together to provide a better world for their children to live in.
Robert Gardner is co-CEO at Redington
