Professor Dame Carol Black, Chair of the Centre for Ageing Better, and Emma Douglas, Head of DC at Legal & General Investment Management, address later life and long-term saving, including barriers to financial wellbeing, initiatives that could drive change, and what motivates them as chairs within the UK Strategy for Financial Wellbeing.

We pay a lot of attention to wellbeing in young people, but perhaps not so much to older people, as we assume it will be there.

Prof. Dame Carol Black

What motivates you to continue being involved with government reviews and the extensive work you undertake?

I love contributing and trying to make things different and better. I must say, I love change and seeing things grow. I used to worry many years ago about taking on things that I didn’t have the complete training for. I obviously understood medicine and what was required, but it took me a while to think “Can I create a good medical centre?”, then it was – “Can I sit on or run a board?” There are many transferable skills, and then you just start to think about having a go at things that are of interest to you. Over the years I’ve than looked for things that have been slightly outside my comfort zone to see if I could do them.

What specifically attracted you to become a chair in the UK Strategy for Financial Wellbeing?

What interested me was the older worker and how to enable people to work longer, should that be what they want to do. How do you have flexibility to do that and support them? And one must be conscious that if you are no longer working and you wish to work, this can lead to poorer mental health, and for those living alone, loneliness which can also be a part of that. There is nothing much sadder than seeing a really deprived older person.

What currently are the greatest challenges for those in later life?

I think health is pretty central, as it affects other things also. Your health really determines your ability to work, but also determines your ability to live an active and engaged life.

Related to health is one’s capacity to, what I would call be purposely engaged. I think we need purpose in life, motivation. It could be your grandchildren, there is a variety of things it could be, and that could be work.

And so, work is also central. If you are living longer and are in good health, you may want to work longer.

So, I think what I’m really interested in is how to improve wellbeing which includes mental and physical health and that sense of contentment with your life. We pay a lot of attention to wellbeing in young people, but perhaps not so much to older people, as we assume it will be there, but I don’t agree that’s necessarily true.

What key initiative would improve the wellbeing of those in later life? 

I think what COVID-19 has shown, is a horrid stigmatisation of the older person in all kind of ways. I think if we could, and yes, it’s a difficult issue, but reduce the stigma that older people feel in all kinds of ways, then I think that would be a great step forward to enabling people to enjoy later life more and their wellbeing.

A cultural shift to celebrate later life, and that older people are still wanting to be engaged with and be a part of society.

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There is so much we can do as fintech comes into pensions to make them more engaging for people.

Emma douglas, Legal and general

What motivates you to continue working in pensions, particularly the DC area?

I think that there is always more to do. We never stop in defined contributions (DC); we are always moving forward and there are some exciting things that are on the horizon.   

There is so much we can do as fintech comes into pensions to make them more engaging for people and, to be honest, bring them more into your everyday life.  I think pensions have been a little bit separate from your finances, but certainly seeing some developments in open banking and open finance, if we can add pensions into the mix, so when you see your savings breakdown and perhaps notice you are spending too much in certain areas, it could help you think about cutting down in one area to put more into your pension.  You’ve got things interconnected so people can actually look at them. 

What specifically attracted you to become a chair in the UK Strategy for Financial Wellbeing?

I suppose for me, I’m at a stage at my career where I want to give something back. And there’s a few things I’m really passionate about: one of those is the gender pensions gap. Obviously it’s linked to the gender pay gap, but it’s slightly different in the sense that woman are really missing when it comes to building a decent retirement pot. 

So the whole challenge that the Money and Pensions Service (MaPS) has put together was really appealing and well expressed, and aspirational. You know, 5 million more people understanding enough to plan for and in later life, that is a lot of people!Understanding is one of our biggest challenges in DC.

As I’ve alluded to, some of the biggest barriers are behavioural as well as structural for those trying to save enough for retirement, especially when it comes to DC schemes. Of course auto enrolment (AE) has been great. But AE goes up to a point, and in itself it won’t get everyone certainly to a comfortable level of retirement.  

What currently do you feel are the greatest barriers for those trying to save enough for retirement?  

I think we are back to the understanding point.  Understanding what you need to save and understanding what that will get you in retirement. Without giving people the basic reference points, it is difficult for people to know the answer to, “Well am I going to have enough?” Or the converse is, “What am I going to be able to afford with what I’m going to get?” So just making that a bit more visible and real to people will help us so much in DC. 

Is there a key initiative or policy change that could significantly improve pension savings? 

If you were to ask me to pick one, it would be the extension to AE that would make the biggest difference.  Within the Challenge Group we have already debated that. There were recommendations from the 2017 review that haven’t yet been implemented.  Just because AE has been so successful, I would love for us to build on that and do more.  So that’s lowering the age, removing the lower earnings limit and aspirationally increasing the 8% to 12% and contribution levels gradually over time, splitting that between employee and employer in a more equal manner. I think without a doubt, given how much AE has impacted the industry to date, and people’s lifespans extending, that will be the most single most important thing we can do.   

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Learn more about the UK Strategy for Financial Wellbeing , look out for upcoming recommendations from all 11 Challenge Groups, and join the conversation on social media at the hashtag #UKFinancialWellbeing.