I am rather surprised that Aviva, which prides itself on consumer engagement, should be surprised at pension saver disengagement (FA, 2 June).
Why should this be surprising? It is certainly understandable. Pensions have been a political football for far too long. The rules keep changing. Those who wish to seriously engage have been disincentivised through all the various constraints and limitations.
As for auto-enrolment, the opt-out enquiries will grow when the contributions rise. The target cohort for this woebegone scheme has, by and large, not seen their income increase for years. They now have unasked-for amounts filched out of their pay packets, making them even worse off now for some kind of uncertain promise in 20 or 30 years’ time.
Small employers (who make up the majority in our economy) are hardly overjoyed either. They are now burdened with extra bureaucracy and red tape and are being dragooned into being a division of a government benefit agency. Both parties are still firmly convinced that National Insurance is the tool that fulfils this role.
Then of course, you have the wider government policy. Sure, they shed crocodile tears about the savings gap – now less than 4 per cent and the lowest in the developed world (as a comparison, Germany’s is 17 per cent). Instead of addressing this they encourage spending at every turn. We have ‘pension freedoms’. Our economy is based on people going shopping. The move towards a cashless society means that for most, they lose track of their expenditure. The new apps on phones are particularly pernicious. A few quid here, a few quid there and at the end of the month – ‘oh my we have overspent by £300’.