Pension Reform and Personal Accounts after the Credit Crunch

Last Tuesday (24^th March) the International Longevity Centre-UK (ILC-UK) and the Actuarial Profession hosted a Joint Debate at the Institute of Actuaries in London on aspects of pension reform and personal accounts and the implications of the current credit crunch.

Chaired by Baroness Sally Greengross and introduced by a speech from Nigel Waterson MP, Shadow Pensions Minister and Shadow Minister for Older People, the 2-hour session was remarkably interesting (if you’re into that kind of thing) and was extremely well-attended, mostly by people from within the pensions, actuarial and financial services industry.

As this was a debate mainly consisting of people inside the industry “looking out” there was a substantial element of “preaching to the basically converted” and much of the debate was about the “how” of saving for one’s old age and whether this did the trick. There was, therefore, a lot of comment regarding what one might consider to be the technicalities of structuring and operating a pension scheme. Also, running through, was the (unsupported) hope that people would move away from property as the means to save and back towards pensions.

In this latter respect research by the Pensions Policy Institute, represented by Niki Cleal, was particularly revealing. Her comment was, in a nutshell, that those who saved probably saved across the board, that is pensions, property and ISAs etc., in contrast to those who probably had little of any. This is not a case of substitution and changing asset allocation.

Rather, we believe,  this is due to:-

1)       the lack of sufficient resources for people to be able to save at the current time, or possibly any time

2)       the phenomenal lack of understanding, generally, of what it will take to support oneself in old age in an appropriate style and over an extended and growing potential lifespan.

It is, therefore, the “why” people need to save that must also be addressed. There is an enormous educational task to be undertaken among the population in general and, until this is carried out, even the best designed schemes will have difficulty in succeeding. But all this is manageable given the will.

We are not talking deckchairs, shuffling, Titanic…yet.

Proof of age

A recent interesting article on the Mature Times website (www.maturetimes.co.uk) raised the question of what sort of ID is appropriate for those situations where we are required to provide our (older) age. The standard, of course, is the “bus pass” a strange piece of documentation for those of us who, for various reasons, haven’t been on a bus in many decades.

In the 21st century we really ought to stop making decisions about people based on their age unless there is some legal reason for doing so (e.g. sale of alcohol to minors). Heating allowances and bus passes for people who are affluent and perfectly well able to work (and probably still are) are strange and expensive anomalies.

However when it comes to claiming these and other “perks” the view of most over 60s seems, quite understandably, to be “Well, I’ve paid for it, so I’ll damned well have it”.

In fact concessions do seem like one of the few positive advantages of growing old and a generational characteristic of in my primers seems to be that we do like a bargain. This said, a bus pass is a demeaning and inappropriate proof of age with connotations of impoverishment and senility. Better to bypass it by using a passport or driving licence – unless, of course, you’re trying to board a bus.

For those who have neither, ID cards are sure to be with us within our ageing lifetimes.

Age Diversity in the Downturn

Last Friday (20^th March) TAEN (the Age and Employment Network) and EHRC (the Equality and Human Rights Commission) held a conference on Age Diversity in the Downturn – the business benefits of creative approaches to age management. The conference was held to launch the publication of a new booklet by EFA (the Employers Forum on Age) and TAEN, called “Age matters in a downturn”.

Acronyms aside it was an excellent and inspiring conference with numerous interesting and practical presentations from academics, policy makers and HR practitioners from around the world. Although age in the workplace, particularly in a downturn, is a hugely complex issue, a few simple messages continue to hold sway:

1   The demographic issues and their implications are here to stay and will only get worse regardless of the economic situation.

2.  Age management is a strategic management problem, not just a tactical HR issue. As such, it needs to form part of ongoing management training.

3.  Age equality is a deep seated issue that must be embedded at the level of company values. Ultimately it’s all about human dignity, freedom of choice, and treating people decently.

4.  Age management requires an investment of money, time and effort. But that investment, if businesses get it right, can be repaid many, many times over – in hard financial figures as well as by increased worker commitment, engagement, satisfaction etc.

5.  Organizations should look more closely at what their customers want in terms of age matching. It’s an area which can generate considerable competitive advantage.

The bad news of course is that in the recession age-related initiatives are generally likely to take a back seat to more pressing matters. However those who are clear-sighted and brave enough to continue to devote effort to recruiting, retaining and developing their older talent are likely to emerge as winners in the coming decades.

Play it again Sam – all older people are not the same

I’ve been catching up on news reports about the European Court of Justice’s recent ruling that the UK’s default retirement age is legitimate.

John Cridland, Deputy Director of the CBI lauded the decision as “a victory for commonsense”, commenting that “Some people can happily work in their existing job beyond the age of 65, but this is not possible for all occupations”.

He went on to state that “companies with small numbers of staff have particular problems adapting jobs to the needs of older workers”.

This is a hugely disappointing and massively short-sighted reaction from an organization that should provide a better example and think more responsibly. For a start we now work in a largely service-based economy rather than one based on manufacturing and heavy manual labour. Even in the manufacturing sector, mechanisation means that aspects of many jobs can be far less physically arduous than in the past. So the “some” people he talks about as being able to happily work in their existing jobs is probably the majority. Second, what “needs of older workers” is he referring to? Yes, the minority of manual workers described above may have a need for lighter or supervisory work but the needs of most of the rest of us can be dealt with on an individual basis e.g. stronger spectacles for fading eyesight. Other problems we may have e.g. back trouble, tiredness, can occur in other individuals also, they are not the sole prerogative of those who are older.

The overarching need of many (but again, not all) over 65s - in increasing numbers – is simply the need to be able to continue to work to secure their financial future. What this means is a need to be treated equally with younger employees and a need to be trained and developed in order to be able to respond to opportunities and keep pace with workplace developments.

Yet again, sweeping statements are applied to a group which is not homogenous. It sounds like a typical “I’m alright Jack” statement by someone who ought to know better.

Understanding the meaning of age

The more we study ageing the more it becomes apparent that what we know is less about fact and lived experience and more about perspective. The topic is researched, monitored and analysed from the economist’s perspective, the medical practitioner’s perspective, the historian’s perspective, the sociologist’s perspective, the psychologist’s perspective, the employer’s perspective - and many more. And often the information we are exposed to is what is reported upon from the journalist’s perspective, i.e. what makes a good story.

Sometimes it’s easy to forget that and to accept what we read and hear as “fact”. Fact it may be in a particular arena but without a context the implication and importance of it all is debatable.

When interpreting the significance of trends on our own ageing selves we need to bear in mind that every rule will have its exceptions. For example, we may all be living longer overall but many will still die in “young” old age. What this means is that as individuals we need to cherry pick our own best case scenario and use that as our guiding perspective. After all, belief precedes action; if we believe that we will, individually, have a happy, secure and fulfilling old age then we have a better chance of making it so. Not by pure belief alone but by manoeuvring our own way through the forest of predictions and perspectives and choosing those actions which will help fulfil our own vision of the future.

Is this the way to Amarillo..?

A recent US report on housing development for the elderly was illustrated by this picture of a resident room in a facility for the elderly in Amarillo Texas.  The 60-unit facility combines a high-quality resident experience with a supportive environment for families. Each 350-sq ft private room features wireless networking to connect to the outside world; window seats provide sleeping spaces for overnight visits. Resident beds can be wheeled outdoors onto terraces.

What is most noticeable is the amount of daylight, the wonderful view and sunlight. Whilst we can’t do a great deal about the latter in the UK this nevertheless looks like a superb template for sheltered accommodation. Particularly (hallelujah!) wireless networking. How about putting some of our currently under-utilised architects into coming up with similarly exciting projects here?

1% into a third of the population… just doesn’t go.

According to a recent report commissioned by the Independent Inquiry into the Future of Lifelong Learning only 1% of the UK’s national education budget is currently spent on the oldest third of the population. This is despite the fact that there are now more people over 59 than under 16 and that most people can expect to spend a third of their lives in retirement.

Yet in the current economic climate everyone needs to continue learning. One of the commonest stereotypes we have to face is that older people are resistant to learning and slow to learn yet research studies repeatedly show these fallacies to be inaccurate and unfounded. What is true is that in the workplace or outside of it, older people actively want to learn but are offered comparatively few opportunities to do so – particularly in key skill areas such as technology.

The report comments: “Although everyone’s quality of life depends on the economic productivity of ‘working age’ adults, it does not follow that the maximum good of the population as a whole is served by focusing everything on paid employment and young people. Even if it is right for the bulk of public funding to be spent in this way, government needs to consider how the other kinds of learning need are to be met, and to ask whether 1% of the public education budget is a proper share to tackle the learning needs of a third of the population.”

Whilst applauding this statement, it surely misses the point that the upper third of the population is currently and increasingly going to represent working (or trying to work) people. That 1% must be increased if for no other reason than that.

Funkyfogey’s Brain Gym

Closer investigation of a recent press release reveals that the link www.funkyfogeybraingym.com leads to a potentially interesting site designed to help funky fogeys (over 45s) enjoy a longer, happier, and healthier life by spending a little time each day on mental exercises that do for the brain what aerobics does for the body.

At the outset a free Brain Age Test calculates your brain age compared to your chronological age. This test is designed to uncover the true age of the brain, and to act as a reference point for future brain improvement. Upon completion of the test you receive a full and confidential report by email.

By regularly using the facilities at the Funkyfogey Brain Gym individuals not only improve their memory and general brain functioning  they are also are contributing valuable information and data for scientific research into how the brain works being undertaken by Mind Lab International – a brain research organisation based in the Innovations Centre at the University of Sussex,.

It deserves a closer look for no other reason than it’s a great name.  Funkyfogey.  I like it.

I wish I’d looked after…

The current economic climate seems to be doing everything possible to make us feel helpless – and in some cases downright desperate and depressed. The only antidote is to try to be positive and to look at what we can do in the face of it all to regain some control and prove we can change things. One of the most significant challenges for the over 50s is to look after our health particularly in the light of a new blast of publicity showing that  record levels of drinking, obesity and sedentary behaviour are causing UK citizens to have the highest proportion of preventable cancers ( in a comparative study with the US, Brazil and China).

According to the report by the World Cancer Research Fund around 78,000 of us (of all ages) develop cancer needlessly each year because of our unhealthy lifestyles.  Yet healthy living could prevent 39 per cent of cases of the 12 major cancers – including bowel and breast cancer as well as mouth, pharynx and larynx cancer and cancer of the oesophagus.  Even more thought-provoking is that these figures don’t include smoking which accounts for one third of cancer cases.

Although the report recommends government intervention to encourage a switch to healthy foods, the ultimate answer – regardless of how unpalatable – is surely that we all have to start taking more responsibility for ourselves and our future health. As older people (reputedly wiser) we also need to be role models for our children, grandchildren, colleagues and friends.  Okay, no one wants to start apportioning blame at the stage where you find you’ve succumbed to cancer (or heart disease, stroke, and other related catastrophic  illness) but on the other hand it’s too late then to start wishing you’d looked after your health.