Blog: Pensions and the ‘new normal’

As the vaccine rollout continues and lockdown measures are eased, everyone is hoping that the world and people’s lives will be back to normal sooner rather than later.

However, things will probably never be the same again. The coronavirus pandemic has highlighted failings and complacency in the pre-pandemic world, with many believing that a ‘new normal’ will emerge.

In our everyday lives, this includes flexible working, wearing masks in public if you are ill, and taking more care to protect those who are most vulnerable, but it can also apply to pensions.

With people more focused than ever on their money in these financially trying times, it may be an opportune moment for the industry, government and regulators to help drive adequate pension saving amongst the population.

Earlier today, Hargreaves Lansdown published research that revealed it had seen a “big rise” in its clients transferring and consolidating their pension pots, with this kind of evidence that savers are engaging more with their pensions, and finances in general, being seen across the industry.

The increased focus on sustainability and ethics has also helped drive member engagement, with the Make My Money Matter campaign, co-founded by film director Richard Curtis, showing that pensions are becoming a more mainstream discussion.

Ethical and sustainable investing it something that the general public really cares about, and it is imperative that the industry capitalises on this to help people save for a comfortable retirement, while making the world a better place, as we move to the ‘new normal’.

Auto-enrolment has enabled more people than ever to save for retirement, and this less-active form of engagement is likely the way to proceed with the majority of the population.

But again, this must be capitalised on. The government and regulators can use the figurative blank slate the post-pandemic world provides to reform the system.

Calls for auto-enrolment reform are nothing new, but this opportunity of creating a ‘new normal’ for pensions should not be passed up, with changes to the minimum wage and age thresholds potentially helping address the gender pension gap as well as retirement poverty.

As we come out the other side of this awful period in our lives, hopefully we can create a better world for everyone to live in, including in retirement.

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