Dr Ros Altmann has long been one of the most vocal and visible commentators on retirement. A former investment banker turned consumer champion for older workers and pensioners, she was an advisor on pensions and investment governance issues under the Tony Blair government.
From 2010-13, Ros was Director General of The Saga Group, and has lobbied hard on many issues affecting older people, including securing compensation for those hit by Equitable Life, fair rates for savers, and reform of the annuity system.
And while many women born in the 50s find it unfair that their State Pension Age is to rise, they have to thank a high-profile campaign led in large part by Ros for the fact that the changes were not as severe as they could have been.
Following the General Election, Ros has been made a Peer – she sits in the House of Lords as Baroness Altmann of Tottenham – and was appointed Pensions Minister.
We have to stress that this interview was conducted before Ros’s appointment as Pensions Minster and these responses were given in a personal, rather than Governmental, capacity.
“Young people aren’t turned off by pensions anymore”
There’s a definite perception that younger workers don’t see saving for retirement as a priority, with paying off debt – be that credit cards or student loans – and getting onto the housing ladder being much more important priorities. Ros disagrees. “I’m not convinced that young people are disenfranchised with the idea of pensions,” she says.
“Indeed, young people have been far less likely to opt out of auto-enrolment pensions than older workers, so there is clearly an acceptance of the need to save for retirement.”
Research seems to bear out this point of view. Figures from the government-backed NEST pension scheme show that just one in 20 under-30 year-olds have opted out when put into a pension scheme under automatic enrolment – about half the rate of over-50s.
The media focus on retirement also seems to be changing attitudes and getting younger workers to consider their futures sooner rather than later – NEST found 40% of 22-30 year olds said they would think about retirement planning sooner than in the past.
Things might be changing, but there is still clearly more that can be done. “I think there is an issue with the image of pensions and the problems of past schemes which have let customers down or failed to deliver good outcomes,” says Ros.
“This is a challenge to the pensions industry to provide good quality and good value pension saving vehicles, to also engage their customers in the savings process, help them understand the value of long-term investment, talk in plain English, reduce the jargon and make pensions more user-friendly and intelligible.”
“I enjoy working – I can’t imagine stopping altogether.”
As the retirement industry becomes more open, thanks to consumer pressure, more educated and savvy savers and the effects of regulation, so too is the nature of retirement changing.
The ‘feet up’ idea of retirement is increasingly becoming thing of the past. Ros has been very busy in working to encourage older workers, who wish to remain in the workforce, to continue in their roles.
“I think we are slowly moving to an era where retirement becomes a process, rather than an event, with people cutting down their working week, rather than suddenly stopping altogether,” she says.
A more joined-up approach to retirement throughout working lives could drastically improve retirement outcomes. “Encouraging people to save more when they are younger and plan to work longer if they can would both make a significant difference to later life income,” says Ros. But doing so may be easier said than done.
“We need to overcome age discrimination in the labour force and also need to help people recognise that they may benefit from working longer – not just for financial reasons but also because they may find work itself an important part of their life.”
As for her own retirement, Ros clearly intends to take her own advice on working longer. “I have no intention of retiring unless my health fails,” she says. “I can envisage slowing down later in life but enjoy working and being busy and cannot imagine stopping work altogether.”
As newly-appointed Pensions Minister, Ros’ agenda is already filling up. She has to implement Government plans to allow existing retirees to sell their annuities – and the creation of a second-hand annuity market – the roll-out of the flagship New State Pension from 2016, and complete the process of automatically enrolling some 10 million workers from around 1.3 million employers into pension schemes by 2018. No mean feat, and there can be few people better qualified to take it on.
This article has been commissioned by retiresavvy and any opinions voiced are the author's own. Image credit: Dr Ros Altmann by Saga Group - Saga Group. Licensed under Creative Commons Attribution-Share Alike 3.0 CC BY-SA 3.0 via Wikimedia Commons.
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