The auto-enrolment experiment marks a first for UK Government. For the first time, a public policy initiative will be judged not by what happens, but by what doesn’t happen.Steve Webb‘s primary metric for judging our appetite for the new pension reforms is the number of people who vote against it and opt-out.
So far the run rate looks like 10% and the Minister has made himself a hostage to fortune, “downhill all the way” is what his critics are whispering, pointing to lower levels of engagement the further you go down the employer food-chain.
Far from sitting on his hands, Steve Webb has been very much on the front foot, launching his pot follows member initiative in a week when the Work and Pension select committee issued their report on workplace savings and the FCA put their foot down on platform rebates. Government intervention in the savings market has never been so marked.
Ominously though, the noise is very much between policy makers , the manufacturers (funds and platforms) and the distributors. The consumer is not yet part of the loop.
All that is going to change as debate on pensions moves out of the Westminster Chambers and the offices of the ABI/ IMA /NAPF and the various think tanks and into the workplaces of the million plus organisations for whom auto-enrolment into work place pensions will be new.
Last week I argued in this blog that we are not really prepared for what will happen – how can we be – nothing like this has ever been tried before. We may try to control the Tsunami as it rushes at us but we could be washed away if we do. Better for us to move to higher ground and watch and listen.
If we think that we can moderate social media conversations to make sure that Mum and Dad approve of people’s language and that nobody’s being rude about Auntie Edith, then we don’t know how social media works – or how useful it can be.
Social media is self-policing. That’s its strength. If someone posts a ridiculous or ill-informed opinion, other members of the community correct them. Mum and Dad can join in the conversation if they need to, adding new thoughts, but it’s not THEIR conversation, it’s not THEIR media.
Just like the water-cooler in the traditional office, conversations that go on in social media belong to the participants. And if you try and clamp down, they’ll just move to the photocopier or the mail room. What’s great about social media, unlike the water-cooler, is that you know what people are saying. . That’s what brochures and letters were for. Remember them?
So there’s your take-away Mr Webb. The challenge for the DWP is not to take charge but to watch and listen. The danger is that policy is made by those not watching and not listening.
Steve Webb is hearing second-hand whispers around the water-cooler; people (it is said) are not happy with loads of pension pots- ok, let’s sort pot follows member; people are saying they can’t stomach falls in the nominal level of their pot – ok, let’s give investment to the banks with their structured products;
Read what Vincent is saying again. Social media is self policing, some things said are daft and sometimes you have to wait till things correct.
If you are a policymaker you need to be asking the meaningful question
Would people be prepared to lose 10% of your pension pot to get one great big pot or another 10% to get a big fat guarantee?
There is no doubt that Steve Webb wants to be at the water cooler and no doubt he is hearing what he can from the people who turn up at conferences and from his advisers.
Now he can be a little more ambitious and ask the meaningful questions to those at the water-cooler.
He could use opinion pollsters or get people into focus groups , he could go on question time and ask for a show of hands. That’s how it used to be done – small samples , expensive with unwanted bias’.
Or he could be a little braver and go and talk with the people who really know how to find out what the public want – Money Saving Expert, MoneyMail ,the Sun , bbc.co.uk. He could get them to ask their publics the meaningful questions.
If Steve Webb really wants to manage the AE Tsunami , he should be asking questions about the key trade offs around every digital water-cooler in the land. These big bets around “pot follow member” and ”defined ambition “ are about how people buy things and the price they are prepared to pay for them.
Never before has a Government had such an opportunity to find out what people want and are prepared to pay for and what they just don’t understand.
So why doesn’t it ask?