1. Can’t retire / Won’t retire Hilary Salt Sarah Burnett

2. What’s happening on Planet Pensions? Redesign of pension schemes Mass auto-enrolment Flight planning Buy out Defined ambition Single Tier Pension Ending contracting out Pot follows member Limits on dc charges

3. Our motivation for the paper “sometimes pensions seem so complicated that I cannot really understand the best thing to do”. ‘I think you work hard all your life and you’re just worried that the government will bring in a scheme that robs you of that money that you’ve worked bloody hard and saved for.’

4. What is retirement? How do people understand pensions? Scheme design issues Role of the individual Life expectancy The Employer State Pension Age

5. SPAs (or individuals’ perceptions of SPA) are an important reference point and social norm for retirement expectations MalesFemales

6. Retirement Drawing a pension What is retirement? Her scheme pension age: 58 by scheme A 65 by scheme B 66 by NEST She thinks she retired at 63 Penny’s career Full retirement Drawing a pension, ceasing paid work

7. Full retirement ≠ economic inactivity What is retirement? Unretirement Reversing retirement decision and returning to paid work “The total net contribution of older people in 2010 is estimated to be worth nearly £40 billion, and by 2030 the overall value of the net contribution is anticipated to grow to nearly £75 billion.” 5.11% of males 2.7% of females

8. ‘I think you need to invest your money in things that you understand, and I don’t understand pensions and stocks and maths and things, and I get property, I understand that... I would feel more comfortable putting my money into something that I [get] rather than just trusting a man who I’ve never met before to look after my money for 35, 40 years. To me that is just alien...” ‘I think that the bad press that pensions and finances have had the last 10 years have changed everybody’s attitude. Years ago, it was rock solid. [There was an advert with] a man on a tower, and he’s got a safe guard around him – that’s how you thought pensions were, but so much has happened over the last 10 years.’ ‘With all the changes [made by] the new government it’s definitely more of a risk, and you do get the feeling that one day pensions won’t exist anyway.’ “dealing with pensions scares me” – one third agreed with this statement How do people understand pensions?

9. Does it matter if we don’t understand how our cars work? All that matters is that they work We’re not expected to fix them if they break down People shouldn’t need to understand pensions Just so long as they work How do people understand pensions?

10. Scheme design issues 1. Retirement age Link to State Pension Age but no firm link between scheme pension age and the age at which members actually retire

11. Scheme design issues 2. Flexibilities 3. Defined contribution schemes part-time and flexible work is more appealing to older workers issues of affordability retirement income may be insufficient

12. Role of the individual health status - most important determinant over the decision of remaining in work versus withdrawal or retirement. Other key factors: financial status, family commitments, job characteristics and structural influences such as the availability of work and State benefits.

13. Life expectancy Males Females Proposal to link State Pension Age to life expectancy One solution: life expectancy and healthy life expectancy would need to increase concurrently The challenge: encouraging people to work for longer

14. The Employer Research shows a slight decline in productivity with age but older workers compensated for this decline with skills and higher levels of experience Recruitment and retention of older workers Flexibilities Age was an important factor in the decision process Physical barriers Lack of non-demanding jobs with the same Employer Need to encourage Employers to work more collectively

15. What does all this mean? Currently we design the pension then people have to work around it: –They don’t understand it –It’s too “lumpy” and inflexible –Our problems aren’t their problems We need to design pensions around people

16. Initial pointers for the pensions industry? 1.Not having all your savings in one ‘pot’ might be a good thing 2.We need to think more clearly about combinations of: Need solutions and products that cope with all of these Unretirement Career breaks Part-time work 3.But, as an industry, we can’t do this alone Need government to remove some of the restrictions placed on schemes Legislation should focus on establishing principles, not prescribing the details Penny – having different sources of income allowed her to tailor her savings to suit her circumstances