Jam today -- Jam tomorrow -- or no jam at all.
In 1996, Oasis, who were supported by The Charlatans, Kula Shaker, Manic Street Preachers, The Bootleg Beatles, The Chemical Brothers, Ocean Colour Scene and The Prodigy, played two shows with an audience of 150,000 per night. Over 2.6 million people applied for tickets for the shows, making it the largest ever demand for concert tickets in British history. If the average of people there was 20-25 today they are 36-41 I wonder how many of them have a pension pot. I suspect not many. If this is the case then how many of the Rihanna generation 16-21 are wise to the problem. Maybe none.
Pensions are not very exciting for someone below the age of 40. They are possibly one of the most impossible things to market and get mass appeal and understanding. I wonder if you could get Rihanna to appear in an advert telling us to save for our old age. John Lydon, now that he has passed the butter test, would do it but possibly would not be the best brand ambassador. In terms of marketing it is a fairly tricky task which the industry and government have had little success.
There is little sex appeal in thinking of getting older, death and the finality of the whole form of existence. But pensions are important and like car insurance they are a necessary evil. Smokers know that they should not smoke as they can't run up stairs, it ruins their sex life and ultimately kills them. If you don't have a pension and you read articles you get those similar pangs of guilt, shame and anguish. What will happen when you hit 60? Will you spend your 80s living under bus shelters. It goes onto the 'must do' list which never gets done.
These were the thoughts going through my mind this morning at the launch of the Social Market Foundation pension report "Jam Tomorrow?: The next 20 years of savings policy." It was dry but when and if you read the report you know these people are right. They had a dry panel to match a dry topic. Lord John Hutton, Paul Johnson, Director, Institute for Fiscal Studies, spoke wisely and reenforced what most people know -- this is time bomb and public policy is failing the public.
Dr Nigel Keohane, Deputy Director, Social Market Foundation, provided the graphs and interesting statistic on how 50% do not even have £1000 put away for a rainy day. Jeff Prestridge, Personal Finance Editor, Mail on Sunday did that 'man of the people' part - we are angry with government bit - which in fairness the mail very well and that's why they cause problems for this government on this issue. It will be interesting to see how radical their campaign on ISA reform and pensions gets over the coming months as it is a significant vote winner or loser for all political parties.
In summary the story is the same. Baby boomers, although they have lost out because of quantitative easing, have done alright. The Jam generation who rocked to a town called malice are probably alright as they are in the 50s now. Everyone below the age of about forty is a bit screwed. Out of this group the middle-income, or the people Gidoen Osborne likes to call "Wealthy" are the most screwed. They can choose to save cash that they can access or lock it in a pension.
We are now living in the era of the individual. Companies don't pay in for employee final pensions, government means test most social groups out do the individual is responsible for everything. The problem is the individual in most cases is trying to keep their head above water. Or they do know about the problem and just flick the two fingers at the government and financial institutions The problem is four fold:
If you can't market and explain why people should pay into pensions then you wont take the masses with you.
If the squeezed middle are skint already then how, even with auto-enroll, put enough money aside.
Leaving the responsibility up to the individual does not seem to work so we need to look for alternative options.
The choice between saving and a pension should not be the choice - the industry needs to innovate to get the consumer involved.
The debate continues.
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