Let the Seeds flourish
“The best time to plant a tree was 20 years ago, the second-best time is now”
Ancient Chinese proverb.
After a mortgage, a pension is likely to be the largest investment that an individual will have. There are exceptions to the rule of course but for most, this holds true, and yet many do not even think about a pension.
“I’m not saving enough for my pension and I’m not going to put off doing anything about it by pretending I can’t do anything about it” is a criticism often placed upon people but in reality, it is difficult for many to do something.
As a society, on average, we are fitter for longer, and a long and healthy retirement is something that all should aspire to. A third of your life could be pension driven so allowing people to see their pensions in one place and understand the implications is important.
On the 1st October Pension Bee and Plaid released a paper outlining the benefit that open finance can bring to pensions, on top of the pension dashboard. They wish pensions to be, if not the major focus of open finance then certainly one of the major priorities. I agree with this given the fact that so many of society are ill prepared for retirement.
“Lack of engagement with pensions is a ticking time bomb for UK society. If we do not address this early enough, millions of people could retire into poverty with no guarantees the state can support them.” Claire Reilly, Pension Bee.
Educating about the importance of pensions and delayed gratification is crucial. The problem is however that ill preparedness is generally driven by the inability to save due to low income until it becomes too late.
With the number of pensions that a person may have increasing through auto enrolment increasing, I am a believer in consolidation to give a holistic view of a pension situation. The concept of a workplace pension for an individual following them rather than them being enrolled in different small pots as they go.
Pension consolidation or the pension dashboard require embracing of open finance or ‘open pensions’ to complement the burgeoning open banking environment, which has seen growth in the numbers of people using open banking services from 1m to 2m since February of this year. The government also recently signaled its intention to legislate on Smart Data to allow people to benefit from their data.
Cash back is a popular way of people gaining small increments which build up over time and are then released to the saver by the cash-back provider. What if there was a way to combine cash back, open banking and saving for retirement, people planting that tree early and reaping the benefits later in life.
Step up to the plate Airfunders. Using data that everyone generates through their daily expenditure we are giving cash back a purpose driven edge that is unique. Perhaps cash back is the wrong term. This is about generating benefits in the background for consumers, without them really noticing while creating benefits for retailers and merchants that share purpose driven values and will help us address one of the biggest “ticking timebomb” problems that UK society faces.
Seeds now or waiting for those seeds to flourish into a tree is all about understanding delayed gratification.