Every day I am inundated with umpteen press releases and reports highlighting the terrible impact the cost-of-living crisis is having and will continue to have on households around the UK.
Inflation is soaring. The latest figures showed CPI at 10.1 per cent and recent projections from investment bank Citi estimate it could rise to 18 per cent next year, the highest rate in nearly 50 years.
Energy bills are a primary concern, with Citi forecasting the energy price cap will rise to £3,717 in October, £4,567 in January and £5,816 in April.
In this environment, households are forced to concentrate on the here and now. And while it is natural for the pensions industry to promote pension saving and discourage contribution cuts, it might not be the time to be pushing this message.
If the choice is between contributing into a pension or heating the house this winter, its clear what must take priority.
The industry must consider taking a step back on pushing for improved pension saving for now and try and support people though these difficult times. Employers and providers could consider being less discouraging to those seeking to temporarily cut or halt contributions.
If the industry does take steps like this, communication will be key and its important for individuals to understand the long-term impact of temporarily cutting their pension contributions.
The crisis may have come at a bad time for the industry, with the new Pension Attention campaign due to launch in early September and Pension Awareness week taking place on 12-16 September. As well-meaning and important as these initiatives are, people have much more pressing concerns to be dealing with.
Despite this, pension saving will always be important and there may not be an ideal time to conduct these campaigns over the next year or two. It’s important that the initiatives’ messaging takes into account the cost-of-living crisis and that expectations are tempered.
Furthermore, the crisis is (hopefully) only temporary. The industry must be ready to step back in once inflation is back under control and people are able to afford saving more into their pensions. Timing is everything.
Although people’s focus is on currently on paying the bills and feeding the family, pensions will again become something that people need to consider more urgently. The industry will do well to pick its moments to have maximum effect.
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