Three things need to be put at the top of Labour's list for solving the UK's pension problem, Aviva's Alistair McQueen has said.
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."
He said: "We already have some great stuff sitting on the table and that needs to get done first.
"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.
