The head of savings and retirement for Aviva told FT Adviser he welcomed the reforms outlined by new chancellor Rachel Reeves this morning (July 8) but said the pensions profession was not hoping for “any new, flashy ideas.”

“The three priorities should be to implement the 2017 auto-enrolment reforms, implement the pension dashboard, and conclude the advice/guidance boundary review.”

According to McQueen, the cohort of people with defined benefit pensions is in decline and it will not be too long before the majority of Aviva’s customer base is in defined contribution schemes – a situation that will be replicated across all the UK’s pension companies.

This necessitates a sea-change in policy as the challenge of having millions of people needing help with their DC pensions is “fast coming over the horizon”.

Advice-guidance boundary

Taking the advice/guidance boundary recommendations forward would be a significant win for the new government, he said.

“This is why we are passionate about taking the advice/guidance boundary review forward. We cannot have a situation with nine of out 10 people navigating retirement with no financial help or support.

“It is one of our top three priorities”, he told FT Adviser, adding the life and pensions company was “having live conversations with the FCA how to take the theory of the advice/guidance reforms and put them into practice”.

McQueen said: “We would like to see both the simplified advice and targeted support elements taken forward”.

This would mean the new Labour government needs to influence the risk appetite of the regulator.

McQueen explained: “The FCA can be risk averse and the regulated world is often so concerned about getting things wrong, but if financial advice is to be fit for the future we need to expand that horizon beyond the one-in-10 people in the UK who have taken financial advice.

“The FCA ultimately reports to the Treasury, so I believe the government will require the regulators to press ahead with the recommended reforms.

“From our conversations with the regulator, they are very much for that conversation, and they want to get it right, but we can’t wait for that change to happen as people are heading towards an uncertain retirement

“The government must set an agenda for the regulator to follow, so that every part of this system changes.”

Auto-enrolment

The importance of this is even more pronounced when one considers the way in which auto-enrolment has seen nearly 11mn Britons start to save for their retirement.

With every single qualifying UK employer now offering an auto-enrolment pension scheme, the UK has the “foundations” for improving people’s retirement outcomes, but unless this government implements the 2017 reforms, there will be “millions of angry people in 10 years’ time, demanding answers as to why they have not had the desired outcome”, McQueen warned.

The 2017 reforms, as reported by FT Adviser, included bringing the minimum age to 18, to allow more younger workers to save as soon as possible into their professional lives.

“People say how successful auto-enrolment has been in getting people saving, but we cannot rest on the laurels of a decade past”, he said.

That 10mn or so additional population of workplace pensions savers also need support and better education to help them realise their future retirement will not be anything like it was in generations past, he said, referring to some analysis Aviva carried out earlier this year.

The analysis suggested that if people are only saving the maximum 8 per cent into an auto-enrolment pension, they would fall short of their expectations in retirement.

“The analogy we used is that if you live in London and you want to retire in Edinburgh, and just do the minimum in terms of contributions, then the bus you are on will run out of petrol by the time you get to Blackpool.”

Dash for the dashboard

His last request is for the Labour government to finally get the long-promised pensions dashboard over the line.

“Back in the 1990s one of the pensions ministers mooted the idea of having everything online, and now 30 years later we’re still considering it.

“It seems that the pensions industry is still in the digital stone age. Figures suggest while 90 per cent of us manage our bank accounts online, only 10 per cent of us manage our pensions or investments online. There’s a massive, gaping opportunity for our industry to improve that.

“It’s not a nice-to-have; it’s a must-have”, McQueen said of the dashboard.

“That doesn’t mean it has to be the perfect solution from day one. Indeed, the old adage ‘the quest for perfection is the enemy of the very good’ can apply to the pensions dashboard.

“But we need to have this in place within the next five years. There are so many stakeholders and over the past few years we have laid some great foundations, so there is no reason why it should not happen within this parliament.

“It will be embarrassing if it is not”.

He said all three things, taken together, would work hand-in-hand to help millions of pension savers be confident in their financial decisions.

Waiting is over

Referring to FT Adviser’s editorial last week where the watchword was ‘Wait’, McQueen added: “I think some of the waiting is over, with the announcement today (Monday July 8) that Sir Stephen Timms has been appointed as a Department for Work and Pensions Minister.

“We would say that is positive to have someone like him in the role, who is knowledgeable and ambitious for developing UK pensions.”