Paul Waters looks ahead at the main themes for 2018
Our predictions for Workplace Savings for 2018
09 Jan 2018 - Estimated reading time: 3 minutes
Our prediction of the main themes in 2018?
We expect to see savings rates continue to improve across the UK in 2018. In DC pensions we are likely to see consumers benefiting from lower charges as governance and investment product pricing improves. There will also continue to be a high degree of innovation in WPS and benefits technology, from which there will be a few winners but also lots of failures.
Robo-advice will do nothing in terms of closing the advice gap in 2018. The current robo-advice solutions in the market are too complicated to use and too narrow in the way they can help people. Until these are developed to help the masses in what matters to them, not just the elements which are sufficiently lucrative to the providers, they will remain too niche to solve the growing advice gap in the UK.
What will be the biggest challenges?
The biggest challenge is, as always, to help consumers make sound financial decisions. To achieve this, employers will need to be able to access the sort of technical and financial products that people need in a form that meets their objectives. These will be wide ranging, from debt management, to savings, to accessing the finance to enable their lifestyle choices. We know the consequences of poor financial decisions can be severe, the challenge is to help people effectively in the areas that matter most to them.
How do we rise to these challenges?
Through continued investment in simple technology and leveraging scale to deliver solutions. For example, developing simple savings products that can be accessed without the need of advice through a platform or app, and distributed widely through the workplace. This allows attractive products to be offered at a low cost to the provider at a price that is attractive to enough consumers. By being ruthlessly focused on what matters most to people, such as simple products with clear communication and transparent pricing, and not compromising on the delivery. It’s important not to opt for the “least bad” close fit solution that is easy to implement.
What’s on our wish list for the year ahead?
In 2018 we’d love to see the abolition of the Lifetime Allowance and at the same time an increase in the Annual Allowance. It would also be great to see strong new entrants in the lifetime savings markets to challenge established market participants. Generally, a benign economy with sound UK growth would be a great benefit for all.
To read our other predictions for 2018 see our related content below